The meeting discussed the proper legal form for approving the inter-registration of financial products between the GCC financial regulators
The meeting recommended the development of an integrated vision for issuing uniform investor numbers and forming a GCC federation of exchanges
Pursuant to directives from H.E. Abdulla bin Touq Al Marri, Minister of Economy and Chairman of the Board of the Securities and Commodities Authority (SCA), SCA participated in the 22nd meeting of the Committee of Heads of the GCC Financial Market Authorities (or their equivalents) held via conference call. SCA’s delegation at the meeting was led by H.E. Dr. Maryam Al Suwaidi, Acting Chief Executive Officer. Present at the meeting were heads of the GCC financial market regulators and H.E. Khalifa bin Saeed Al Ebri, Assistant Secretary General for Economic and Development Affairs at the GCC General Secretariat.
Working Group on Financial Market Integration Strategy
The committee agreed that the General Secretariat circulate the draft agreement/framework for the inter-registration of financial products between the GCC financial regulators to all member states, which will then provide the General Secretariat with their insights and feedback on the proper legal and legislative tool to approve the inter-registration of products under the powers assigned to each regulator before the end of July.
It was agreed to consider drafting regulations for the inter-registration of products to promote mutual fund units across the GCC region following the approval of the above-mentioned agreement/framework and to start charging fees on the inter-licensing funds wishing to promote their units in a GCC state, or exempt them from such fees, as deemed appropriate by each state.
In addition to the above, it was agreed that the Saudi Capital Market Authority (CMA) prepare a working paper to study the possibility of incorporating a third party to approve the Know Your Client (KYC) requirements and to add such requirements to the account opening requirements and the KYC procedures. It was also agreed that the Working Group on Financial Market Integration consider all these requirements and communicate its conclusions to the committee at its next meeting.
Communication and Investor Awareness Working Group
As to the Communication and Investor Awareness Working Group, it was emphasized that the working group will develop a standardized program to raise the awareness of investors across the GCC financial markets. The working group briefed the committee on the outcomes of the Basics of Investment Campaign, led by the Saudi CMA, and the outcomes of the Think Before You Invest Campaign, led by Kuwait’s Capital Market Authority.
As to developments with regard to the MoU signed between the GCC financial regulators, the committee agreed that member states continue to provide the GCC General Secretariat with suggestions or remarks concerning the MoU implementation and that such remarks must be presented to the committee on a regular basis.
Meeting of the heads of financial market authorities with heads of exchanges
In a related context, SCA’s delegation participated in the third meeting between the Committee of Heads of the GCC Financial Market Authorities with the heads of exchanges in the presence of H.E. Al Ebri and representatives from member states and the GCC General Secretariat.
During the meeting, a briefing was given with regard to the decisions made by the committee at its 21st meeting held in September to approve the initiatives that would contribute to promoting coordination among the GCC financial regulators.
A vision for a GCC federation of exchanges
It was also agreed at the meeting that the GCC exchanges develop an integrated vision for issuing uniform investor numbers and that the Saudi stock exchange (Tadawul) prepare a working paper studying the formation of a GCC federation of exchanges in coordination with the rest of the exchanges across the GCC region. The paper will also outline the objectives, functions, and the relationship of the exchange with the General Secretariat and the GCC financial regulators.
Participants in the meeting also discussed the licensing of brokers between the GCC states—using the passporting regime—and the conclusions made by the Working Group on Financial Market Integration Strategy regarding the development of a general regulatory framework for the inter-licensing of investment products and instruments and another regulatory framework for the inter-licensing of private and public investment funds.