The Capital Market Authority"s Board approved the Implementing Regulations of the New Companies Law for Listed Joint Stock Companies to be effective as of 26/06/1444H corresponding to 19/01/2023. The approval of the Implementing Regulations comes in the implementation of the New Companies Law and based on the authority the law granted to the CMA to regulate the matters and subjects stipulated in the Law related to joint stock companies listed on the exchange. This comes as part of the CMA"s objectives to regulate and develop the capital market and contribute to achieving the CMA"s strategic objectives by enhancing confidence and raising the level of governance in the capital market. It also aims to stipulate the necessary rules to implement the provisions of the Law and contribute to realizing its goals. The CMA Board"s resolution included amending six implementing regulations, which are: the Implementing Regulation of the Companies Law for Listed Joint Stock Companies and the Corporate Governance Regulations, the Merger and Acquisition Regulations. It also included the Rules on the Offer of Securities and Continuing Obligations; the Procedures and Instructions related to Listed Companies with Accumulated Losses Reaching 20% or More of their Share Capital; and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority. Such amendments took into consideration stipulating the necessary rules to implement the provisions of the Law in addition to making the necessary amendments in line with the Law. The main elements of the implementing regulations included renaming "the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies" to become "the Implementing Regulation of the Companies Law for Listed Joint Stock Companies". It also included stipulating the provisions that aim to raise the level of governance of the board of listed joint stock companies, including: provisions related to board members" duty of care and duty of loyalty; determining the method of voting in the election of board members. It stipulates the requirements related to a shareholder reserving a seat on the board pursuant to the company"s bylaws; regulating the period in which board members shall continue in their capacity after the end of the Board tenure or the resignation of its members and until the election of a new board. It sets the controls on the general assembly"s delegation to the Board to authorize a board members" participation in any businesses that may compete with the company or any of its activities; and developing the provisions related to the formation of the Audit Committee and stipulating which of those provisions apply to companies listed in the Parallel Market. The main elements also included setting out the maximum period for the external auditor"s term; regulating the distribution of dividends to shareholders and what constitutes distributable profits; stipulating the provisions related to the issue and conversion of the types and classes pf shares. It will regulate the forward split or reverse split of shares; regulating the Squeeze-out and Sell-out provisions stipulated in Article 230 of the Law, including the relevant disclosure requirements and conditions for the offer price; and stipulating the provisions governing a company"s demerger; and other matters. In relation to the maximum period of the external auditor"s term stated in Article (3) of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, and seeing as the period that an external auditor spent as an external of a company since the effective date of the Companies Law issued by Royal Decree (M/3) dated 28/01/1437H counts in calculating the aforementioned maximum period. The CMA Board"s resolution included that companies must amend their positions in accordance with Article (3) of the Implementing Regulation of the Companies Law for Listed Joint Stock Companies within a period not exceeding two financial years from its effective date on 26/06/1444H corresponding to 19/01/2023. The CMA Board resolution also stated that the following amendments to the Corporate Governance Regulations should be effective on 19/06/1445H corresponding to 01/01/2024: Amending Articles (73, 74, 75) of the Corporate Governance Regulations from being guiding articles to mandatory articles. Amendments to Paragraph (4) of Article (24) and Subparagraph (3) of Paragraph (b) of Article (52) and Paragraph (b) of Article (54) and Paragraph (11) of Article (87) of the Corporate Governance Regulations. Provided that the aforementioned provisions of the Corporate Governance Regulations issued by CMA Board resolution (8-16-2017) dated 16/05/1438H corresponding to 13/02/2017, shall remain effective until the effective dated of the abovementioned amendments. The approval of the implementing regulations comes after the CMA published the draft amendments of the Implementing Regulations of the New Companies Law for Listed Joint Stock Companies on the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform) affiliated to the National Competitiveness Center and the CMA"s website for public consultation. The CMA also held a workshop for listed companies that included introducing and discussing these amendments and obtaining comments and suggestions from the participants, as well as answering their inquiries. The implementing regulations can be viewed via: Implementing Regulation of the Companies Law for Listed Joint Stock Companies, Amended Corporate Governance Regulations, Amended Merger and Acquisition Regulations, Rules on the Offer of Securities and Continuing Obligations, Procedures and Instructions related to Listed Companies with Accumulated Losses Reaching 20% or More of their Share Capital, and Amended Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority. — SPA