COUNTRY FOCUS / Oman
Fairness,
integrity & transparency
O
n June 20, 2022, Oman’s new
Securities Law RD 46/2022 (the
A commentary “Securities Law”) came into force
on a major recent and effect. It repeals the Capital
Market Law 80/98 (the “Capital Market
development in
Law”), save in respect of certain provisions
Oman’s securities concerning the establishment and objects of
laws, by Jeremy Oman’s Capital Market Authority (“CMA”).
The executive regulations to the
Pooley, Salma Securities Law are expected to be issued
Al Wahaibi, and by the CMA during the next 12 months,
Turkiya Al-Haddabi and until they are so issued the executive
regulations to the Capital Market Law will
of SASLO. continue to apply unless they conflict with
the Securities Law.
The primary objectives of the Securities
Law are to ensure fair, competitive and
transparent dealing; to support and
encourage SMEs by regulating public
fundraising; to protect consumers; to
ensure the integrity, efficiency, fairness
and transparency of securities markets and
transactions; and to manage risks arising
from or related to securities transactions.
REGULATED ACTIVITIES
The Securities Law now forms the key pillar
of Oman’s securities law and its scope is
wide-ranging. At its core is the requirement
that a person may not engage in activities
or provide services or products related
to “securities” (which are now broadly
defined) without first obtaining a licence
from the CMA to do so. There is also a
wider restriction on the provision of certain
services (such as auditing, assessment,
credit rating and advisory services) to
entities conducting licensed activities under
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the Securities Law without prior registration
with the CMA.
The executive regulations to the
Securities Law are expected to describe,
inter alia, those specific activities or entities
that do (and those that do not) require a
licence or registration from the CMA, as
well as those activities that CMA licensed
entities are prohibited from conducting.
Entities carrying out activities in the fields
of intermediation/brokerage, market
making, custody, asset management,
margin financing, and investment banking
are all specifically identified as entities
operating in the field of securities; the
executive regulations to the Securities
Law will specify other activities requiring
a licence, and until those executive
regulations are issued it is reasonable
to assume that the regulated activities
described the executive regulations to the
Capital Market Law will continue to
require a licence.
The CMA’s prior approval is required
inter alia for changes in management,
share capital, or shareholder control of
regulated entities, and is also required
before a regulated entity can be liquidated.
The names of certain customer-facing
employees of must be published. Regulated
entities must also comply with the CMA’s
code of conduct.
INVESTOR PROTECTION
Entities licensed by the CMA are subject
to additional conduct of business rules
under the Securities Law, with a view to
further protecting customers. By way of

illustration, these conduct of business
rules require regulated entities to comply
with enhanced suitability requirements
when dealing with inexperienced and/or
lower net worth customers. This should
be viewed in the context of the CMA’s
recently published consultation paper
concerning the regulation of PE/VC funds,
which contemplates that investment into
such PE/VC funds will be limited to certain
categories of investor. It would not be
unexpected if the executive regulations
to the Securities Law were to further
distinguish how investors are protected
according to their sophistication
and/or wealth.
The CMA is required under the Securities
Law to establish a “Consumer Protection
Fund”. The Consumer Protection Fund is
designed to compensate persons dealing
with CMA licensed entities in respect of
certain specified losses.
CAPITAL MARKETS
The Securities Law also replaces the Capital
Market Law as the legal foundation for all
capital markets transactions, and regulates
not only issuers but also services providers
both in the context of such transactions
and in respect of their general obligations.
It is not permitted under the Securities
Law to issue securities or prepare for their
issue in a public or private subscription in
Oman without the approval of the CMA. A
person wishing to carry out a public offering
must now obtain the prior approval of
the relevant securities exchange. Owners
of securities listed on an exchange must
be provided with the opportunity to sell
their securities at a fair price in the event
of a change in the control of the issuer or a
substantial accumulation of shares by any
person (whether acting alone or in concert).
SME FUNDRAISINGS
The Securities Law allows the CMA to
reduce the regulatory burden in respect of
public fundraisings for the benefit of SMEs.
FINANCIAL TRUSTS AND COLLECTIVE
INVESTMENT FUNDS
There are new provisions in the Securities
Law concerning financial trusts and
collective investment funds. The stated
purpose of the financial trust is to operate
and manage collective investment funds,
structured products, special purpose
companies and securities portfolios.
COUNTRY FOCUS / Oman
The financial trust is potentially a very
adaptable structure, and we expect the
executive regulations to the Securities Law
to clearly identify the circumstances in
which it can be deployed.
SPECIAL PURPOSE COMPANIES
The Securities Law also contains new
provisions regulating special purpose
companies (“SPCs”). SPCs are exempt
from the provisions of the Foreign Capital
Investment Law RD 50/2019, from income
tax under the Income Tax Law 28/2009, and
The CMA’s
from certain fees. SPCs are typically used prior approval
when structuring sukuk offerings. is required inter
alia for changes
CMA POWERS OF INVESTIGATION AND
INTERVENTION in management,
The CMA has increased powers of
investigation and seizure under the
share capital,
Securities Law. It also has authority to or shareholder
share information resulting from its control of
regulated entities,
investigations with both domestic and
foreign regulators and authorities. This
could mark a new emphasis on reporting and is also
those operating in Oman without the
requisite licence to regulators in their
required before
home territory. The CMA also now has a regulated
wide powers of intervention with respect to entity can be
regulated entities in financial distress.
liquidated..”
MARKET ABUSE
The executive regulations to the Capital
Market Law contained various provisions
concerning the timely disclosure of
material information and insider trading.
The Securities Law contains a wider
prohibition on market abuse to better reflect
international best practice.
1 2 3
Text by:
1. JEREMY POOLEY,
head of corporate, SASLO
2. SALMA AL WAHAIBI,
trainee lawyer, SASLO
3. TURKIYA AL-HADDABI,
trainee lawyer, SASLO
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