CMA outlines new companies law for building a robust capital market
Times News Service
MUSCAT: The new Commercial Companies Law (CCL) addresses numerous matters regulating the Omani capital market to provide for building a robust capital market, Sheikh Abdullah Salim Al Salmi, Executive President, Capital Market Authority (CMA), said.
He said that the law conferred on CMA the whole powers to regulate the public joint stock companies since establishment, supervision on their work to ensure they conduct in accordance with sound administrative rules to protect the shareholders. This would limit the duality of powers and identifies the powers of other entities to which the issuer of the security is subject to further to central authority in easing the procedures of establishing public joint stock companies without the need to call on more than one entity, he added.
Al Salmi said that the new CCL comes at a time when Oman is preparing for 2040 vision which focuses on enabling the private sector to take the lead in the production process and effectively contributing to the growth of the economy and creating employment opportunities for the citizens.
One person company
Al Salmi explained that the law copes with the recent developments in the financial industry such as providing Islamic finance products such as Sukuk and Islamic investment funds. Due to the special nature of such products such as Sukuk a new legal form was required for commercial companies such as one person company which is a limited liability company owned by one natural or juristic person as establishment of such types of company contributes to boosting the Sukuk market in Oman as the entities desirous of issuing Sukuk establish an independent entity know as special purpose vehicles to be the link between the issuer of Sukuk and Sukuk and investment unit holders.
The law provides the holding company will take the form of joint stock company unlike the previous situation where the holding company had the option to be limited liability company or joint stock company.
Al Salmi said the law identifies the holding company as being joint stock company with financial and administrative control over one or more company whether joint stock or limited liability by holding at least 51 per cent of the shares of such companies.
This tendency comes to curb unethical practices in financial transactions or misuse of commercial practices under the umbrella of a commercial enterprises which lacks adequate controls for risk management while the regulations for joint stock companies cover all aspects of management of subsidiaries or establishment of new companies by availing investment opportunities. We think this would contribute to enhancing the activities of the companies and fine tuning many administrative practices which would result in positive performance. With regard to professional firms the Executive President of CMA explained that the law included a new article on the professional firms such as accounting and law firms etc. The law provided for sound legal basis for establishing professional firms and special rules will be issued for their regulation by the Council of Ministers.
Full story @ timesofoman.com/business