Article 43 of the Saudi Capital Market Law
المادة 43 من نظام السوق المالية
The article requires the Authority to announce acceptance or rejection of a prospectus, with power to set its period of effect, and requires the issuer to notify the Authority in writing of any material change and publish a press release.
Official text (Arabic)
This article has not been amended since the law was issued.
أ - يجب على الهيئة بعد قيامها بمراجعة نشرة الإصدار إعلان قبولها أو رفضها للنشرة. وللهيئة في حالة قبول النشرة أن تحدد فترة زمنية تكون نشرة الإصدار نافذة خلالها.
ب - يجب على كل مصدر يطرح أوراقًا مالية للجمهور عن طريق نشرة إصدار أن يخطر الهيئة خطيًّا بأي تغيير يطرأ على البيانات الواردة في نشرة الإصدار مما قد يؤثر على قيمة تلك الأوراق المالية أو سعرها فور علمه بحدوث هذا التغيير، كما يتعين عليه إعداد ونشر بيان صحفي للإفصاح عن هذا التغيير. وتحدد لوائح وقواعد الهيئة المعلومات التي يجب الإفصاح عنها، والشروط التي تنطبق على البيان الصحفي.
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 43 explained in plain English
This article deals with what happens after the prospectus is submitted, and sets two obligations: one on the Authority and the other on the issuer.
Paragraph (a): the Authority's duty
- After reviewing the prospectus, the Authority must announce whether it is accepted or rejected.
- If it is accepted, the Authority may set a period of time during which the prospectus is effective.
This article sets no deadline for the review. Article 44 sets out the cases in which the board may reject a prospectus, including that it does not contain the information required by Article 42, that it contains incorrect or misleading information, that its fees have not been paid in full, or that the issuer has not submitted the reports provided for in Article 45.
Paragraph (b): the issuer's duty after the offering
Every issuer that offers securities to the public by a prospectus must:
- notify the Authority in writing of any change to the details of the prospectus that may affect the value or price of the securities, as soon as it learns of the change;
- prepare and publish a press release disclosing that change.
The Authority's regulations and rules specify the information to be disclosed and the conditions that apply to the press release.
The important limit is that the obligation is tied to a change that may affect the value or price. The original content of the prospectus is specified in Article 42. An issuer may use a lawyer specializing in securities to assess whether a particular change requires disclosure.
Practical example
A company in Jeddah offered its shares to the public with a prospectus stating that the subscription proceeds would be used to build a factory. Its board then decided to cancel the project. If this change may affect the value or price of the shares, the company must notify the Authority in writing as soon as it learns of it, and publish a press release disclosing it.
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 43 of the Saudi Capital Market Law
Must the Capital Market Authority respond to a prospectus?
Yes. After reviewing the prospectus, the Authority must announce whether it is accepted or rejected.
Does a prospectus have a period of validity?
When it accepts the prospectus, the Authority may set a period of time during which the prospectus is effective.
What must an issuer do if the prospectus details change?
It must notify the Authority in writing as soon as it learns of any change that may affect the value or price of the securities, and prepare and publish a press release disclosing it.
More articles on Offering Prospectus and Offering Securities
- Article 40
The article bars offering securities until the prospectus has been submitted to the Authority and published and commissions paid, lets the Authority exempt some requirements, and sets the permitted ways of making the offer.
أ - يتم نشر محتويات نشرة الإصدار المنصوص عليها في المادة الثانية والأربعين من هذا النظام أو أي أجزاء منها على النحو وللفترة التي تنص عليها لوائح الهيئة وقواعدها
- Article 41
The article bars the issuer, its affiliate and the underwriter from selling the issuer's securities until the Authority has approved the prospectus and it has taken effect, and requires the approved prospectus to be sent to the buyer before the sale.
لا يجوز للمصدر أو تابع المصدر أو متعهد التغطية أن يبيع أوراقًا مالية مملوكة لذلك المصدر قبل أن تعتمد نشرة الإصدار من الهيئة ويبدأ سريان مفعولها، ويشترط أن ترسل
- Article 42
The article sets out the information a prospectus must contain: a description of the issuer and its management, the securities, proceeds and commissions, audited financial position, and whatever else the Authority requires.
يجب أن تتضمن نشرة الإصدار المعلومات والبيانات الآتية: أ - المعلومات التي تتطلبها قواعد الهيئة التي تبين وصفًا كافيًا للمصدر، وطبيعة عمله والأشخاص القائمين على إ
- Article 44
The article lets the Authority's board reject a prospectus if its information is lacking or misleading, its fees have not been paid in full, or the issuer has not submitted its periodic reports.
يجوز للمجلس أن يرفض نشرة الإصدار في أي من الأحوال الآتية : أ - إذا لم تتضمن نشرة الإصدار المعلومات التي تتطلبها المادة الثانية والأربعون من هذا النظام. ب - إذا
- Article 48
The article authorizes the Capital Market Authority to set disclosure forms and instructions, relieves it of responsibility for missing or misleading documents filed with it, and makes the publisher of an advertisement responsible for its publishing errors.
أ - تحدد الهيئة نماذج وتعليمات الإفصاح، بما في ذلك المعلومات التي يجب أن تتضمنها نشرات الإصدار والتقارير الدورية ، التي يتعين على الجهات التي تخضع لرقابة الهيئة
- Article 55Amended by M/16
The article gives a buyer of a security the right to compensation if the approved prospectus contained materially incorrect statements or omitted material facts, and specifies who is liable, how liability can be defeated and how compensation is calculated.
أ - إذا تضمنت نشرة الإصدار عند اعتمادها من قبل الهيئة، بيانات غير صحيحة بشأن أمور جوهرية، أو أغفلت ذكر حقائق جوهرية يتعين بيانها في النشرة، فإنه يحق للشخص الذي
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.