CMA tells financial entities to verify IPO filings before acceptance: Argaam

RIYADH: The Saudi Capital Market Authority has instructed financial institutions not to accept initial public offering applications without prior verification.

Applicants who file for subscription must have the capacity to cover the application value, Argaam reported, citing unnamed sources.

In addition, upon completion of the book-building period, the CMA urged financial advisors not to use the term “collected funds” in announcements about coverage ratios.

CMA is noticing high levels of coverage for unrealistic subscriptions during the book-building period in offerings, the sources added.

The sources stressed that all financial entities must abide by the stock market regulator’s law, adding that the CMA is flexible when it comes to raising retail portions of subscriptions.

Earlier this month, the Saudi Central Bank, SAMA, directed banks to halt the option of opening online accounts for individuals or institutions, as part of new security measures effective April 10.

Prompting the decisions is an increase in fraud that has been observed recently, through impersonation of platforms that sell goods or provide services, with names of official entities, to obtain access data on electronic banking services.