Oman adopts new securities law to strengthen capital market

Muscat: The Financial Services Authority (FSA) on Sunday adopted the Executive Regulation of the Securities Law, representing an explanatory legislative framework for the implementation mechanism of the general rules stipulated in Royal Decree No. 46/2022.The move aims to achieve legislative and technical readiness to elevate the performance of capital market institutions and securities entities in the Sultanate of Oman, enabling them to keep pace with rapid developments driven by financial technology and innovative financial instruments. The regulation comprises seven chapters covering various aspects of capital market regulation: Chapter One on definitions and general provisions; Chapter Two on capital market institutions; Chapter Three on operating entities, including their licencing, activities, and obligations; Chapter Four on credit rating agencies and their operational requirements; Chapter Five on collective investment schemes; Chapter Six on issuing entities, their disclosure obligations, and market integrity provisions; and Chapter Seven on the Grievance Committee, which regulates procedures, review mechanisms, and rulings regarding appeals against decisions issued by the Authority, its Board Chairman, or its Chief Executive Officer.The regulation attaches significant importance to providing competitive financing options within the national economy and enhancing flexibility to attract local and foreign capital to the capital market sector, thereby supporting national economic activities and boosting investor confidence through principles of fairness, integrity, and transparency.The decision issued by the Chairman of the Authority's Board of Directors stipulated that the Executive Regulation of the Securities Law shall come into force on the day following its publication in the Official Gazette, in its issue published on Sunday (26 July 2026).The decision instructed the Chief Executive Officer of the Authority to issue the necessary instructions, forms, and circulars to implement the provisions of the attached regulation. Until their issuance, existing instructions, forms, and circulars will remain in effect, provided they do not conflict with the Securities Law and its Executive Regulation. The decision also directed capital market institutions and securities entities to align their status within six (6) months from the implementation date.Licenced banking institutions operating securities-related activities were granted a maximum grace period of three years to adjust their operations so that these services are delivered through an independent entity, except for custody, safekeeping, and underwriting activities, which banks may combine with their commercial operations pursuant to Article 2 of the regulation.Ahmed Ali Al Maamari, Executive Vice President of the Authority, explained that the issuance of the regulation follows a comprehensive review of the legislative structure governing Oman's capital market sector, aiming to position the sector as a primary financing vehicle to achieve national priorities under Oman Vision 2040.In a statement to Oman News Agency (ONA), Al Maamari said the regulation represents a structural transformation in Oman's capital market by redesigning its regulatory framework and detailing specific provisions for capital market institutions and operating entities, most notably their minimum capital requirements and obligations.He added that the regulation incorporates investment banking into the licensed activities for securities entities, enhancing the operational role of these institutions in stimulating the primary issuance market and providing liquidity. As intermediaries and advisors between companies and investors, investment banks help align financing with project scope and timelines, furthering capital market growth.He noted that the regulation revised existing rules governing crowdfunding activities based on an evaluation of past performance, aiming to foster growth in the next phase and expand innovative financing solutions for small, medium, and micro enterprises in the local market.Al Maamari emphasised that the regulation outlines regulatory objectives and operational risks for regulated institutions, allowing them to take necessary measures to achieve objectives and mitigate risks under the Authority's supervision. This is supported by risk-based supervision provisions, including capital adequacy reporting, market, credit, and operational risk management, and business continuity planning.He added that the updated formulation restructures fees associated with capital market services and activities to balance regulatory requirements with easing operational burdens, thereby boosting market competitiveness. Additionally, it establishes a framework to register and regulate local and international credit rating agencies in the Sultanate of Oman, which will enhance the credit rating ecosystem, localise expertise, improve the reliability of credit evaluations, elevate risk assessment efficiency, and support investors and decision-makers.He stated that the regulation empowers the Financial Services Authority to license activities associated with modern financial technologies and innovative financial instruments lacking specific legislation under a regulatory sandbox. These activities will operate under flexible, market-responsive criteria set by the Authority to accommodate emerging financial products. He affirmed that this step encourages innovation, supports digital solution development, and attracts fintech investments in the securities domain, while preserving market integrity, stability, and investor protection.