CMA Amends trading commission for listed share, and allocates a portion of the commission to investment and financial awareness programs
The Capital Market Authority Board have amended the level of commission on any buy or sell of equity share transactions by increasing it from (0.00120) one hundred and twenty in one hundred thousand (0.120 %) equating to 12 base point or 12 Riyals for every ten thousand Riyals transaction, to be (0.00155) one hundred and fifty five in one hundred thousand (0.155 %) which equates to (15.5) base points or 15.5 Riyals for every ten thousand of the deal's value.
The Board's decision also included the elimination of the minimum commission for any executed order of equity shares with a value equal to or less than ten thousand Riyals. The decision shall be effective by Sunday 12/10/1437H corresponding to 17/7/2016.
The CMA takes this step as part of its continuous efforts to regulate and develop the Capital Market and apply best international practices which would reflect positively on all market participants.
When reviewing this change, the Authority took into consideration the anticipated approval of fees for the deposit, transfer, settlement, clearing and registration of ownership of securities traded on the Exchange, intended for the Saudi Stock Exchange (Tadawul) as part of the amended fees.
Moreover, a portion of equity share trading commission will be allocated to support the development of a national program aimed at increasing the level of investment awareness. This program aims to raise the level of financial, saving and investment awareness within market participants, while encourage civil institutions to participate in the safeguarding of investor interests. Furthermore, this portion of trading of equity shares commission will support the establishment of the Capital Market Academy, and encourage the supervisory role of Authorised Persons. It is worth noting, that the amendment of these commission, is designed to help Authorised Persons invest in developing national talents and promoting additional investment in infrastructure to meet developments to the capital market.
The CMA also announced that it is reviewing current procedures used for collecting fines and penalties on Capital Market Law violators, in order to develop comprehensive mechanisms to compensate those affected when a final decision is made by the Committee for the Resolution of Securities Disputes. The effected person will be reimbursed by using the recovered illegal profits resulting from the violations as an alternative to depositing it in CMA's account.
It is worth mentioning that the amended trading commission is distributed between CMA, Tadawul, and Authorised Persons according to specific percentages. The final percentages will be announced to the public after reviewing fees for the services provided by Tadawul.