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Muscat Securities Market

The Muscat Securities Market (MSM) was established in May 1989 under a Royal decree that set the legal framework for the establishment of the market as an independent organization to regulate and Control the Omani securities market. However, in order to segregate the regulatory authority from the exchange, the Market was restructured in 1999, through the Capital Market Law that provided for the establishment of the Capital Market Authority (CMA) as a separate entity.

The CMA is responsible for the supervision of both the MSM where all listed shares are traded and the Muscat Depository and Registration of Securities Company (MDRSC), which is the sole provider in Oman of the registration and transfer of ownership of securities, as well as the safekeeping of the ownership documents.

MSM is divided into the Regular, Parallel and Third Markets. The Regular Market has strict listing requirements and companies must have a history of profitability to be listed on it, while the parallel
Market has easier listing requirements.

Electronic screen based trading was introduced in the second half of 1998. This has produced faster and more accurate share registration, settlement, clearance and transfer functions and has brought MSM, at par with other major stock exchanges.

MSM is considered as the one of the highest regulated markets in the region, with strict rules and regulations laid out to check any malpractice or insider trading. Companies are required to conform on extensive disclosure norms to ensure maximum transparency. Listed companies are required to publish quarterly financial results, prepared in accordance with International Accounting Standards.

Trading Procedure - Muscat Securities Market

Trading in MSM is controlled through an Electronic Trading System, based on a Unique Shareholder Number that is allotted to each investor. The shareholder number is obtained from the MDRSC and requires the submission of a form, for the first time, one-day prior to execution. Orders are routed through authorized brokers on the trading floor and the MSM regulations forbid trading outside the trading floor except for specific situations, such as family transfers, inheritance, etc.

Certain situations shall require a deposit to be made by the investor, but it is not required if a custodian is involved. Trade advice is sent to the investor, and to the custodian, upon execution of the deal.

Settlement in MSM is T+3 and is routed through the assigned broker.

Rules and Regulations - Muscat Securities Market

MSM has in place a very elaborate and stringent set of regulations to ensure transparency and the fairness of execution for all investors.

 
Primary among them are as following:   

v  Order execution is based on the Unique Shareholder Number, thus reducing the risk of misplaced deals.

v  Timely entry of orders gives priority to investor in trading. 

v  Price cutoff mechanism at 10% of previous closing level reduces the possibility of off-base prices for market orders

v  Board member transactions are announced upon execution on a special news screen on the trading floor, thus reducing price manipulation.

v  Strict control over brokers on the floor to ensure best professional conduct by brokers.

v  New regulations aimed at preventing insider trading impose huge fines and criminal proceedings on persons indulging in deals based upon unpublished information.

v  Regulations require public companies to disclose any information that could materially affect trading of any scrip in the market.

v  Public companies are required to appoint an Internal Auditor/Compliance Officer, reporting to the board, in order to boost internal controls

 

 
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