On 25 February 2021, the Board of Directors of the Capital Market Authority (“CMA”) issued a decision (Ministerial Decision 27/2021) pursuant to the Commercial Companies Law RD No. 18/2019 (“CCL”) approving the Executive Regulations (the “Executive Regulations”) for Public Joint Stock Companies (“Company” or “Companies”), which covers all regulatory aspects relating to public joint-stock companies with reference to their operations and activities. The Executive Regulations became effective on 1 March 2021 save for those provisions which concern the appointment of Companies’ internal auditors and legal advisors which will be effective from 1 September 2021.
The Executive Regulations have been issued for completion of the regulatory framework contemplated by the CCL. The aim of the Executive Regulations is to provide the legal architecture to help enhance the confidence of investors investing in the Omani capital market for it to be a sustainable engine for economic growth, encourage wealth creation and achieve the national priorities of 2040 Oman Vision.
The Executive Regulations are intended to improve the investment environment and to encourage the private sector in sustainable development, to streamline legal processes and to limit the CMA’s role to supervision whilst providing a clear legislative framework for Companies to implement their plans and strategies in a transparent manner.
The Executive Regulations regulates the election of directors of companies and their responsibilities. Candidates standing for election to a board of directors may only be natural persons (i.e. corporate entities may not be elected to the board) in order to provide stability and limit changes in the composition of boards of directors. The maximum annual remuneration of a Company director has been increased from OMR 200,000 to OMR 300,000.
The Executive Regulations comprise of 12 Chapters which cover the establishment of Companies, raising of capital through public offerings or otherwise, mergers, conversion of Companies to other forms of Companies or vice versa, company management, and general meetings.
Chapter 9 of the Executive Regulations provides for Companies to conduct an audit either internally through an independent in-house audit unit or externally by engaging an audit firm accredited by the CMA for such purposes. Companies are further required to appoint a legal advisor, who may be a full-time employee of the Company with adequate qualifications and experience or for the role or a licensed law firm registered with the CMA.
Chapter 10 specifies the powers of Company officials who are authorised to act as judicial officers in collaboration with the CMA and the Minister of Justice in accordance with the Financial and Administrative Laws and the Consumer Protection Laws of Oman.
The Executive Regulations provide for the imposition of administrative penalties and reconciliation in case of breaches of the CCL and the Executive Regulations. The last Chapter of the Executive Regulations provides for the fees chargeable by the CMA for the services rendered by it to the regulated entities.
The Executive Regulations have repealed CMA Decision No. 137/2002 relating to the election of directors and their responsibilities, assignment of rights issue of capital increase shares, CMA Decision No. 8/2018 on the Accreditation of Auditors, and Decision No. 10/2018 on the Rules for Constitution of the Audit Committee and Appointment of an Internal Auditor and Legal Advisor of public joint-stock companies.
For more on the CMA Regulation, contact Mansoor J Malik firstname.lastname@example.org