Daily Management Review

Saudi Arabia Is Demanding Financial Transparency


03/21/2016


As reported by Bloomberg, citing informed sources, the Saudi authorities for the first time demanded international banks operating in the country to disclose their financial statements and other information. This requirement is designed to enhance financial transparency, and shall enter into force on 1 April.



Abass Chirdon
Abass Chirdon
The Saudi Capital Markets Management (CMA) for the first time asked the international banks operating in Saudi Arabia to openly publish financial statements on their websites, which should increase level of transparency. Along with financial data, banks will have to disclose salaries of top management representatives, as well as serious risk factors. The financial regulator informed foreign banks operating in Saudi Arabia on the new requirements via an e-mail. No further details were mentioned in the letter.

As noted by Bloomberg, the publication of such information will let people know how much the banks manage to make against the backdrop of economic recession, as well as to evaluate costs associated with hiring of the leading banking experts. Saudi Arabia hosts such branches of such large banks as HSBC, for which the Saudi market is a priority, as well as Deutsche Bank, which has achieved best results in the country in the past year. JP Morgan Chase, Goldman Sachs and others also work there. The new requirements of the Saudi financial regulators will affect them all.

Until now, the open financial statements have been obligatory only to 12 Saudi bank, which shares are traded on the stock exchange and which activity is regulated by the Saudi Arabian Monetary Agency (SAMA). As Chairman of the Capital Markets Department (CMA) Mohammed Al-Jadaan stated last year's, the regulator will now behave "more aggressive" in the implementation of the rules in the market, and is going to achieve greater transparency. As part of this campaign, the regulator in the last year has already begun checks on telephone provider Etihad Etisalat on suspicion of violating the rules of disclosure of financial information, market manipulation and trading insider information.

source: bloomberg.com






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