By TBY | Oman | Mar 20, 2018
Enacted in 1998, the current Capital Market Law needs an overhaul to align Oman's maturing economy within the context of ever-changing innovative investment opportunities.
Oman’s Capital Market Authority (CMA), in charge of overseeing the country’s stock market, is in the process of drafting a new Securities Law, in an attempt to protect the interest of investors.
As a part of its strategic plan, the board of the Capital Market Authority (CMA) has released the draft conceptual framework for a new Securities Law and has invited comments from the public. The stated aim for the new draft is to create a radically refreshed architecture for the securities industry in Oman through a high-level, legal wire frame, which will be filled in with detailed regulations under the provisions of the law. The draft follows the contemporary style of legislation through clear provisions that are easily understandable to the common man and does away with arcane legalese or obfuscations. Final codification of the law will follow public comments and necessary refinements.
In an exclusive interview with TBY, HE Abdullah Salim Al Salmi, Executive President of CMA, elaborated on investors’ feedback to the draft securities law. After putting the draft law online, CMA received a huge amount of feedback from investors that was incorporated into the second draft. He explained the next steps of the process, outlining, “The second draft is ready, but now we need to gather the stakeholders again to explain it, get them to understand it, and buy into it. Then we will be talking to the government entities for final approval.”
The centerpieces of the new draft are protection of consumers of securities products and services, allowing autonomy and flexibility to the market infrastructure institutions like Muscat Securities Market (MSM) and Muscat Clearing & Depository, and clear responsibilities and procedures for investigations and inspections, establishing a fair and just regulatory regime for enforcement of the law and allowing new vehicles for collective investments that would be more amenable to the current trends. The emphasis is on sound economic and legal principles to create a superstructure that can be filled in with specific instructions to suit any innovation from the intermediaries.
Many researchers have shown that law matters significantly in defining the characteristics and growth of securities market in countries, and the CMA has taken a bold step in moving forward through this initiative to modernize the securities market in Oman. The new law can capitalize on the political stability of the country, its fantastic relations in the region with its neighbors, and its tax friendliness to create a package that Omani and foreign investors alike would find difficult to resist.