The Capital Market Law

a) The Authority shall have the power to carry out its functions under this Law as well as the regulations, rules and instructions issued pursuant thereto including, but not limited, the power to: 1) Set forth policies and plans, conduct studies and issue rules necessary to achieve the Authority’s objectives. 2) Issue and amend the Implementing Regulations as may be necessary to enforce the provisions of this Law. 3) Approve the offering of Securities. 4) Give advice and make recommendations to government authorities in respect of matters that would contribute to the development of the Exchange and the protection of investors in Securities. 5) Suspend the Exchange’s activities for a period of not more than one day; and in cases where the Authority or the Minister of Finance deems it necessary to suspend the Exchange’s activity for more than one day, the approval of this decision must be issued by the Minister of Finance. 6) Approve the listing, cancel or suspend the listing, of any Saudi Security traded on the Exchange of any Saudi issuer, on any securities exchange outside the Kingdom. Page 10 of 60 7) Prohibit any Security or suspend the issuance or trading of any Securities on the Exchange, as the Authority may deem necessary. 8) Determine the fees and commissions charged by brokers to their clients if the Board deems it appropriate, and approve the fees and other commissions charged by the Exchange, the Depository Center, and the Clearing Center. 9) In addition to other provisions of relevant regulations, the Authority shall have the right to establish standards and conditions required in the auditors who audit the books and records of the Exchange, the Depository Center, the Clearing Center, brokerage companies, investment funds, joint stock companies listed on the Exchange, special purposes entities, and rating agencies and companies. The Authority, with due consideration to its supervisory responsibilities, shall have the right to delegate this responsibility to the Saudi Organization for Certified Public Accountants. 10) Determine the contents of annual and periodical financial statements, reports and documents that must be submitted by Issuers offering Securities to the public or Issuers whose Securities are listed on the Exchange. 11) Define and explain the terms and provisions set out in this Law. 12) Issue decisions, instructions and set the procedure as deemed necessary for the implementation of the provisions of this Law and the Implementing Regulations, and conduct inquiries and investigations regarding violations of the provisions of this Law and the Implementing Regulations. 13) Set Internal Regulations and issue instructions and set the procedures as necessary for the management of the Authority. 14) Approve the regulations, rules and policies of the Exchange, the Depository Center, and the Clearing Center. Page 11 of 60 15) Prepare the regulations and rules for the monitoring and supervision of entities subject to the provisions of this Law. 16) Approve the establishment, merger and liquidation of investment funds and their related operating rules in accordance with the provisions of Article Thirty-nine of this Law. 17) Appoint a licensed auditor to audit the Authority’s financial statements and final accounts. 18) Grant the necessary licenses to be issued in accordance with the provisions of this Law and its Implementing Regulations, including the licensing of rating companies and agencies and the conditions thereof. 19) Prepare the Authority’s annual budget. 20) Regulate the reporting of violations of this Law, its Implementing Regulations, and the regulations of the Exchange, the Depository Center, and the Clearing Center, including determining the financial rewards for those who report such violations, the criteria for its eligibility and disbursement, and the procedures that contribute to the protection of those who report such violations. 21) Establish professional standards for brokers and their agents. 22) Determine the minimum capital required for brokerage companies and the financial guarantees required from such companies, and ensure the strength and durability of their financial positions through the periodic review of their compliance with capital adequacy requirements, in addition to setting out the necessary arrangements to protect the funds and Securities in the custody of brokerage companies. b) Upon exercising its powers in accordance with this Law and its Implementing Regulations, the Authority shall coordinate with the Saudi Arabian Monetary Authority in connection with the procedures that it intends to set that may have an impact on the monetary situation. Page 12 of 60