Riyadh - Mubasher: The Saudi Capital Markets Authority (CMA) has recently approved an updated set of corporate governance regulations (CGR) which will come into effect mid-April 2017.

These are significantly more detailed than the existing set of regulations which were first issued in 2006, Al Rajhi Capital said in a report on Tuesday.

“While the existing CGRs are mostly guiding principles, the new regulations are binding on companies. Relevant international best practices as well as the opinions of specialists and other stakeholders have been taken into consideration in framing the new CGRs,” it explained.

“This is one of the multiple measures being taken by the CMA to develop the Saudi Arabian capital market,” the report indicated.

Listed firms and non-publicly listed financial institutions licensed as authorised persons in Saudi Arabia have already complied with some of these regulations, pursuant to listing rules and the companies law.

However, with a lot of additional measures to improve transparency and disclosures for all joint stock companies, Al Rajhi Capital believes this is a positive step in improving transparency for all stakeholders.

“The changes should be of significant interest to all investors, especially to foreign institutional investors as their participation is expected to increase with the planned Aramco IPO and upcoming index reviews by major providers,” the report concluded.