Muscat Securities Market Muscat Securities Market

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Compliance of MSM-listed firms growing: CMA

(1/10/2018 6:18:00 AM)

Compliance of listed companies in disclosing information on the Muscat Securities Market (MSM) is growing in recent months following stringent action against firms that violate disclosure and transparency norms.

After a series of disciplinary action against companies, especially suspension of trading, the managements are more careful in disclosing information.

“If a company fails to disclose (information), we suspend it from trading because we do not want investors to trade blindly. We also do not want anyone to use a material information that was not disclosed and benefit,” Sheikh Abdullah bin Salim Al Salmi, Executive President of the Capital Market Authority (CMA), told Times of Oman.

However, he said the CMA does not want to harm the market as well by suspending trading. “So, we force the company to disclose the information and allow trading.”

Some misperceptions

Sheikh Al Salmi said that there are some misperceptions about disclosure among the corporate sector. “We do not want any information that will harm their competitive edge... we do not want them to disclose future projections. We ask them to provide the basic information which will enable investors to take the right decision.”

CMA strives to ensure timely, factual, transparent and complete disclosure of the material information by listed entities. Investors have the legitimate right to know any material information and any financial impact thereof at the same time when such information becomes known to the people privy to such information. Of late, trading in several companies, including few blue chip stocks, were suspended briefly on lack of complete information while disclosing board decisions and information related to contracts.

The penalty for incomplete disclosure include suspension of trading until full disclosure is made, while insider trading will attract a fine twice the value of profit generated from such a trade. Also, those who try to mislead investors with false news will attract a fine of up to OMR100,000.

In fact, CMA and the Muscat Securities Market (MSM) are strictly practicing these policies now, which is in the best interest of the market. Also, the disclosure guidelines of the Oman bourse are much more prudent than some of the regional markets.

MSM was the first regional bourse that introduced disclosure of financial results on a quarterly basis, which is at par with international standards.

The investors should know whether the material information has a positive or negative impact on the balance sheet of the company. Also, the information should be equally available to everybody.

As many as 135 companies and bonds are listed on the Muscat bourse.

Times of Oman