Article 4 of the Saudi Capital Market Law
المادة 4 من نظام السوق المالية
The article establishes the Capital Market Authority, linked to the Prime Minister and independent financially and administratively, and prohibits it from trading, borrowing, lending or owning securities.
Official text (Arabic)
This article has not been amended since the law was issued.
أ - تنشأ في المملكة هيئة تسمى ( هيئة السوق المالية ) ترتبط مباشرة برئيس مجلس الوزراء، وتتمتع بالشخصية الاعتبارية والاستقلال المالي والإداري، وتكون لها جميع الصلاحيات اللازمة لأداء مهامها ووظائفها بموجب هذا النظام، وتتمتع الهيئة بالإعفاءات والتسهيلات التي تتمتع بها المؤسسات العامة، ويخضع العاملون فيها لنظام العمل.
ب - يحظر على الهيئة أن تقوم بأي نشاط تجاري، أو أن تكون لها مصلحة خاصة في أي مشروع بقصد الربح، أو أن تقترض أو تقرض أي أموال، أو أن تقتني أو تمتلك أو تصدر أي أوراق مالية.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 4 explained in plain English
This article provides for establishing the Capital Market Authority in the Kingdom, and sets its legal status and the restrictions placed on it.
First: the Authority's status (paragraph a)
- The Authority is linked directly to the Prime Minister.
- It has legal personality and financial and administrative independence.
- It has all the powers necessary to perform its tasks and functions under the Law.
- It enjoys the exemptions and facilities enjoyed by public institutions.
- Its employees are subject to the Labor Law.
Second: the prohibitions (paragraph b)
The Authority is prohibited from engaging in any commercial activity, having a private interest in any project for profit, borrowing or lending any money, or acquiring, owning or issuing any securities.
The evident purpose of these prohibitions is for the Authority to remain a neutral regulatory and supervisory body, not a competing party or one with an interest in the market it oversees. Article 5 then makes clear that the Authority is responsible for issuing regulations, rules and instructions and applying the provisions of the Law, and its tasks include regulating and developing the market and protecting investors from unfair practices or those involving fraud, deceit or manipulation.
For the investor, this article means the body that supervises the market does not trade in it or own shares in it, which supports the neutrality of its decisions.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 4 of the Saudi Capital Market Law
To whom is the Capital Market Authority linked?
The Authority is linked directly to the Prime Minister, and has legal personality and financial and administrative independence.
May the Capital Market Authority buy shares?
No. It is prohibited from acquiring, owning or issuing any securities, and is also prohibited from commercial activity, borrowing and lending.
Which law do the Capital Market Authority's employees fall under?
The article provides that the Authority's employees are subject to the Labor Law.
More articles on Capital Market Authority and Its Powers
- Article 7
The article regulates the composition of the Capital Market Authority's Board of five members appointed by royal order, their terms, and its powers over internal regulations, delegation and review of delegated decisions.
أ - يكون للهيئة مجلس يسمى ( مجلس هيئة السوق المالية ) يتألف من خمسة أعضاء متفرغين على أن يكونوا أشخاصًا طبيعيين سعوديين ومن ذوي الخبرة والاختصاص. ويتم بأمر ملكي
- Article 8
The article requires Authority employees and Board members to disclose, upon assuming their duties, their securities and their relatives', and any change within three days.
يجب على كل من يصبح موظفًا لدى الهيئة، أو عضوًا في مجلسها، أن يفصح للهيئة فور استلامه مهامه، بالكيفية المحددة في لوائح الهيئة، عن الأوراق المالية التي يملكها أو
- Article 9
The article prohibits Authority Board members and employees from any other profession or work, from holding a post at any entity, and from advising private companies.
يحظر على أعضاء مجلس الهيئة وموظفيها ممارسة أي مهنة أو عمل آخر، بما في ذلك أن يشغلوا منصبًا أو وظيفة في أي شركة، أو في الحكومة، أو المؤسسات العامة أو الخاصة، كما
- Article 10
The article regulates meetings of the Capital Market Authority's Board: a call by the chairman, a quorum of three members including the chairman or vice chairman, majority decisions, and remote voting in emergencies.
أ - يعقد المجلس اجتماعاته بناءً على دعوة من رئيسه، ويشترط حضور ثلاثة من أعضائه على أن يكون من بينهم الرئيس أو نائبه، وتصدر قراراته بأغلبية الأعضاء الحاضرين، وإذ
- Article 11
The article makes the chair of the Capital Market Authority's board its chief executive, responsible for running it, carrying out the board's decisions, signing its documents and handling its administrative and financial affairs.
يكون رئيس المجلس هو الرئيس التنفيذي للهيئة، والمنفذ لسياستها، والمسؤول عن إدارة شؤونها، بما في ذلك ما يأتي : أ - تنفيذ القرارات التي يتخذها المجلس. ب - التوقيع
- Article 12
The article has the vice chair act for the Authority's chair when he is absent, unable to act or the post is vacant, and allows the chair to delegate some of his powers in a written and specific delegation.
أ - يقوم نائب الرئيس بأعمال الرئيس ومهماته في حالة غيابه، أو عدم مقدرته على القيام بمهام وظيفته أو شغورها. ب - يحق للرئيس تفويض بعض صلاحياته لعضو آخر من أعضاء ا
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.