Major developments in Oman’s securities laws

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 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 licensed by the CMA are subject to conduct of business and other obligations under the Securities Law; some of these are new, including additional requirements to obtain CMA approval before taking certain actions. The conditions and procedures for incorporating, licensing and registering entities that fall to be licensed by the CMA will be set out in the executive regulations.

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, prepare 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 must also obtain the prior approval of the relevant securities.

The Securities Law also includes a new section concerning trusts (a new form of legal entity in Oman) and collective investment funds. These key provisions will need to be developed when the executive regulations to the Securities Law are issued.

Other key developments include:

• the establishment by the CMA of a “dealers protection fund” (which is designed to compensate persons dealing with CMA licensed entities in respect of certain specified losses);
• scope for the CMA to reduce the regulatory burden under the Securities Law in respect of crowdfunding operations for the benefit of SMEs; and
• new provisions regulating special purpose companies.

The Securities Law implements a wide-ranging reform of Oman’s securities laws, and we will undertake further analysis in due course. In the interim please contact us if you have any questions concerning the scope and application of the Securities Law.