JEDDAH, Saudi Arabia, (Reuters) – Saudi Arabia’s central bank will play a bigger role in the supervision of the country’s financial sector as the kingdom weighs opening up its stock market to direct investments by foreigners.
The country’s Capital Market Authority (CMA) said on Sunday that it had signed a cooperation agreement with the Saudi Arabian Monetary Agency (SAMA) to coordinate supervision of the financial sector in order to improve its stability.
“Saudi Arabia’s Central Bank signed a cooperation agreement with the Capital Market Authority yesterday which aims to set a framework for greater cooperation between the two and to improve supervision over the sectors that they oversee,” it said.
The agreement stated that the two entities will coordinate in the supervision of merger and acquisition regulations as well as the exchange of information.
Currently companies need only CMA approval for mergers and capital increases.
CMA also stated that the two will coordinate before issuing or renewing regulations or taking any steps to ensure the stability of the Saudi financial sector.
Saudi Arabia is in the process of finalising plans for foreigners to invest directly in its stock market, the biggest in the region.