Overview: Oman's New Securities Law (Decree 46 of 2022)

Oman's New Securities Law (Decree 46 of 2022)

"We have seen a systematic erosion of liberty and democracy in Hong Kong. Since the National Security Law was imposed, authorities have cracked down on free speech, the free press, and free association. - Liz Truss, British Foreign Secretary

Oman Sultani Decree Number 46/2022 enacted a new securities law which will come into effect after the day of publication i.e 2022 June. The Law replaces the old securities law enacted by Royal Decree 98/80 aside from the organization of the Capital Markets Authority. The law guarantees fair, competitive, transparent guidelines, support and encourages SMEs by regulating the access of these institutions funding from the public. It also aims to safeguard the interests of dealers, as well as guarantee the integrity and efficiency of the stock market, and achieve justice and transparency in the transactions that take place through it. Article 34 of Oman Sultani Decree Number 46/2022 states as it is illegal to carry out any harmful practices, which as managing or inducing others to deal in view of undisclosed internal data about security that the law requires disclosure, as well as the misuse of undisclosed or confidential data to achieve personal goals or gains for other people and publishing or giving incorrect or misleading data or data which might influence the price of any security or reputation of any issuer or the investment decision of any dealer. It is also illegal to alter any security by providing false requests or stating an inappropriate transaction. It is illegal to trade or allow the trading of securities without the periodic settlement of the connected obligations in accordance with the regulations.

Apart from the skills of the CMA, the Law addresses among others, any substance subject to it with respect to protections, investment funds, a compensation fund, administrative procedures, sanctions as well as criminal offenses. The Law aims to ensure the transactional system in coherence with fairness, competition, and transparency, and distinctly supports SMEs in obtaining finances from the public. Further, the Law plans to safeguard the interests of transaction parties, ensures impartiality and fairness of markets as well as manages risk resulting from all connected securities transactions.

One of the core stipulations of the Law is to present any assistance or product connected with the protection prior to licensing. Prior licensing will likewise be applicable to any adjacent services from capital market institutions as well as from entities working in the field of capital markets. A remarkable exception in modern developments is the exception from licensing for crowdfunding.

The Securities Law frames a key pillar of Oman’s securities law and its extension is wide-ranging. At its core is the requirement that an individual may not participate in activities or offer services or products connected to securities without first obtaining a license from the CMA to do as such. There is likewise restriction on the provision of certain services to entities conducting licensed activities under the Securities Law without earlier registration with the CMA.

Muscat Securities Market Oman

The executive guidelines to the Securities Law are supposed to describe, inter alia, those particular activities or entities that do require a license or registration from the CMA and those activities that CMA licensed entities are denied from conducting. Entities licensed by the CMA are liable to conduct business and other obligations under the Securities Law. Some of these are new, including extra necessities to obtain CMA approval before taking certain actions. The conditions and procedures for incorporating, licensing, and registering entities will be licensed by the CMA and these will be set out in the executive regulations.

The Securities Law likewise replaces the Capital Market Law as the legal foundation for all capital business transactions and directs guarantees, as well as administration issuers, also services providers in the context of transactions and in accordance with their general obligations. It is not permitted under the Securities Law to give protections, plan for their issue, or offer them in a public or private subscription in Oman without the approval of the CMA. A person wishing to carry out a public offering should obtain prior approval of the relevant securities.

The Securities Law incorporates a new section concerning trusts and collective investment funds. These key provisions should be developed when the executive regulations to the Securities Law are issued.

Other key developments are:

• the establishment by the CMA of a dealer protection fund. This is designed to compensate persons handling with CMA licensed entities in respect of specified losses
• scope for the CMA to reduce the regulatory burden under the Securities Law in regard to crowdfunding operations for the benefit of SMEs
• new provisions regulating specific purpose companies.

The Securities Law executes a wide-ranging reform of Oman’s securities laws and will undertake further analysis at the appropriate time.

Conclusion

The new security law Sultani Decree 2022/46, the Sultanate of Oman was enacted by largely replacing the old securities law enacted by Royal Decree 98/80 except for the Capital Markets Authority. The Law tends to any entity subject to it with respect to protections, investment funds, compensation funds, administrative procedures, sanctions as well as criminal offenses.