The Securities and Commodities Authority (SCA) participated in the extraordinary meeting of the Committee of Heads of the GCC Financial Market Authorities chaired by H.E. Dr. Obaid Al Zaabi, SCA’s CEO. Held by videoconference, the meeting examined the GCC financial market conditions in light of the consequences of the COVID-19 pandemic. It came in response to a proposal by the UAE, as the presiding country, and was primarily held to discuss the efforts of the GCC financial market regulators in providing support to markets.
The meeting’s focus was the COVID-19-related measures that these regulators have been taking. SCA presented the measures it introduced to ensure business continuity and contain the impacts of the pandemic as well as the key mechanisms it put into place to support financial markets, most notably amending the limit down on share prices to 5% (with no change to the limit up), facilitating share buybacks, extending the period during which the audited financial statements should be disclosed for an additional 45 days, and postponing the disclosure of this year’s first-quarter statements until the scheduled disclosure of the second-quarter statements on June 30. SCA also instructed that general meetings of shareholders must be held by means of remote communication and that shareholders must vote on resolutions electronically.
Member states participating in the meeting put forward a number of recommendations, most notably ensuring that market makers play a more effective role, especially that the Abu Dhabi Executive Council allocated one billion dirhams for the establishment of a market maker fund to sustain market balance. The recommendations also included encouraging the listing of high-quality companies, particularly government-owned, to increase market depth and using mass media to carry out extensive awareness-raising on matters related to disclosure of material information and market conduct.
Participants also discussed ways in which they can benefit from the experience of some GCC states in introducing stimulus packages intended to mitigate the economic and financial consequences of the coronavirus pandemic.
It has been agreed at the meeting that the General Secretariat will hold regular meetings by videoconference to discuss the latest measures taken by the GCC financial market regulators to limit the consequences of the novel coronavirus. It has also been agreed to require member states to provide the General Secretariat with any guidebooks they have put together or procedures they have in place to deal with the crisis to share them with the other members.
The Committee of Heads of the GCC Financial Market Authorities stressed that financial market regulators will continue to: monitor the latest developments in local and international financial markets, remain in constant communication with stock exchanges to evaluate market performance, follow the developments of the crisis closely, take all necessary actions to hedge against risk, support the operational structure of financial markets, and oversee the procedures for convening the general meetings of shareholders, in addition to considering postposing the disclosure of financial statements.
Participants stressed that the GCC financial markets are sound and capable of dealing with challenges and crises, especially in light of the GCC robust economies and the strong macroeconomic indicators. They explained that they are closely monitoring potential consequences in an effort to contain risks.
Present at the meeting were Dr. Nayef Al Hajraf, Secretary General of the Gulf Cooperation Council; Dr. Ahmed Abdulrahman Al Melhem, Chairman of the CMA Board of Commissioners of Kuwait; Abdullah Al Salmi, Executive President of the Capital Market Authority in Oman; Youssef Al Bilihid, Vice Chairman of the Capital Market Authority of Saudi Arabia; Abeer Al Sheikh Al Saad, Director of the Capital Markets Supervision Directorate at the Central Bank of Bahrain; and Nasser Ahmad Al Shaibi, Chief Executive Officer of the Qatar Financial Markets Authority.