CMA Approves Amendment of Article Related to Returns on the Client’s Money of Capital Market Institutions Regulations

The Capital Market Authority’s (CMA’s) Board approved an amendment to one of the articles of the Capital Market Institutions Regulations related to the returns on client money deposited in client accounts with these institutions. The amendment will come into effect from the date of its publication.

The approval of such Amendments aims to develop the provisions of Article (77) of the Capital Market Institutions Regulations by removing Paragraph (A) and adding a new paragraph. This new paragraph would allow the capital market institution to provide a service to its clients by enabling the client to benefit from their money deposited in a client account by investing it in investment products and receiving returns on it.

The Amendments clarified that the capital market institution must obtain the client’s prior written approval to receive this service and its terms. The investment should be within the Kingdom and in short-term, low-risk products. Additionally, institutions must comply with risk understanding and suitability requirements as per the provisions of these regulations.

The approval of the Amendments came following the CMA’s publication of the draft of “Amendment of One of the Articles of the Capital Market Institutions Regulations” on May 22, 2024, on the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform “Istitlaa”), affiliated with the National Competitiveness Canter (NCC) and the CMA’s website for public consultation.