RIYADH -- The quorum for holding a general assembly for listed companies is set by using the registry of shareholders at the end of the trading period on the day of the assembly meeting, The Saudi Capital Market Authority (CMA) said in a circular.
The Capital Market Authority emphasized that setting the necessary quorum to correctly hold general assemblies for listed companies on the Saudi Stock Exchange is done by using the shareholders' registry in the company's records by the end of the trading period on the day of the general assembly meeting. CMA explained in a circular for all listed companies that violating this is a violation of the validity of the assembly meeting.
The CMA circular is based on the Companies Law and the Capital Market Authority's duties and responsibilities stated in its Law. Paragraph 2 of Article 86 of the Companies Law states that "every shareholder has the right to attend general assemblies even if the company's law stated otherwise. The shareholder can authorize another person to attend the general assembly but he must not be one of the board members or the company's employees"
By that, CMA is continuing its efforts to protect investors in the capital market and allow them to practice all their rights in general assemblies no matter what is the percentage of their ownership in the company. These rights are all guaranteed and stated in the CML and its implementing regulations, especially the Corporate Governance Regulations.
On Nov. 9, 2015, the Kingdom of Saudi Arabia's Council of Ministers approved the long-awaited new companies law 1437H/2015G (the New Law) which comes into force in May 2016.
In essence, the New Law aims to promote small and medium business activity establishing more flexible new entry requirements. It also introduces rules on corporate governance for large enterprises aligned with international best practice. It aims to provide more efficiency and clarity to the regulatory environment in line with the growth of the Saudi Arabian stock market and the influx of foreign investments into the country. Further, it addresses a number of ambiguities which previously existed, and introduces new concepts and rules to simplify and streamline company processes under the Current Law.
It is aimed to modernize the current framework under the law enacted in 1965 (the Current Law). This follows the accession of Saudi Arabia to the World Trade Organization (the WTO) and the commitment of the Kingdom to modernize its legal and regulatory environment in line with international trends and standards.
© The Saudi Gazette 2016
