Financial Sector OverviewSaudi Arabia

Us- Saudi Business Opportunities Forum Chicago April 29, 2010

Some of the Capital Market Regulations Issued.……

Issuance of the Capital Market Law by Royal

Decree 31st July 2003

2003

2006

Issuance of Corporate Governance

Regulations by the CMA 2008

Issuance of Anti-Money Laundering & Counter-

Terrorist Financing Rules by the CMA

2004

Issuance of Securities Business Regulations by the

CMA

2005

Establishment of CMA and Issuance of

Regulations for Offer of Securities

Issuance of Mergers & Acquisitions

Regulations by CMA

2007

Issuance of Investment Fund

Regulations by the CMA

2006

Issuance of Real Estate Investment

Fund Regulations by the CMA

2006

2006

Issuance of Listing Rules by the CMA

2005

Issuance of Authorized Person Regulations by

the CMA

The decentralization of the Financial Sector begins.……

SAMAEstablished 1952

Stock Market Share Trading, Execution & Settlement

Investment Banking Services

Pre-CMA Establishment of the CMA Decentralization of the Financial Sector

Stock Market Share Trading, Execution & Settlement

Commercial Banks’ Lending Activities

Investment Banking Services

Insurance Licensing & Monitoring

Other Traditional Role of a Central Bank

(Money Supply)

CMAEstablished 2004

TadawulEstablished 1984 & Converted to JSC 2007

Hence, the change in the Role of the Commercial Banks..…

Local Commercial Banks

Pre-2001 SAMA Issues Licenses to Foreign Banks in 2001 CMA Established in 2004

Stock Market Share Trading, Execution & Settlement

Lending Activities

Investment Banking Services

Insurance Services

New Licensed Foreign Banks

Regulator: SAMA

Lending Activities

Investment Banking Services

Stock Market Share Trading, Execution &

Settlement

Regulator: SAMA Regulator: CMA

CMA Authorized Person New Licensed Insurance Companies

Insurance Services

Regulator: SAMA

Change in the Responsibilities of the MOCIMOCI

Approve IPO including Feasibility & Valuation of

Issue

Approve Conversion to JSC Status

Monitor JSC Financial Reporting

Approve Allocation of Floated Shares

Monitor JSC Financial Reporting

Approve IPO including Feasibility & Valuation of

Issue

CMA MOCI

Approve Allocation of Floated Shares

Other MOCI traditional role, implement Companies Law,

etc

Other MOCI traditional role, implement Companies

Law, etc

Approve Conversion to JSC Status

The Financial Sector Landscape Today…..

Financial Services

• Commercial Banking Services

• Investment Banking Services

• Insurance Services

Regulations

• Companies Law

•Capital Market Authority’s Regulations

•Banking Control Law

Market ParametersEnd of Period

No of Brokers

New Licensed Brokers

No of listed companies

New Issues

Market cap bn

General Index

1996 - - - - - 1,5311997 - - - - - 1,9581998 - - 62 0 - 1,4131999 - - 64 2 229 2,0292000 - - 66 2 254 2,2582001 - - 67 1 275 2,4302002 - - 68 1 281 2,5182003 - - 70 2 590 4,4382004 - - 73 3 1,149 8,2062005 8 - 77 4 2,438 16,7132006 45 37 86 9 1,226 7,9332007 80 35 111 25 1,946 11,0392008 110 30 124 13 925 4,8032009 110 0 135 11 1,196 6,122

Mar-10 110 0 139 4 1,345 6,801

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