Saudi CMA opens 30-day consultation on enhanced board report disclosures
Key Facts
Saudi Arabia's Capital Market Authority, in an announcement dated 21 October 2026, opened a 30-day public consultation on a proposal to enhance disclosures in annual board reports. The proposal targets the management discussion of financial performance section, as part of the authority's efforts to improve governance, transparency and the quality of information available to investors. It proposes consolidating existing disclosure provisions in a separate section, while adding analytical requirements covering a company's business, results and financial position. The authority said the proposal places these disclosures in a "separate section" within the annual board report. The authority links the development of this content to strengthening investors' ability to analyse companies, exercise their rights and participate in general meetings.
The proposed management discussion section includes an explanation of the reasons for significant shifts in a company's business and performance, according to the authority's announcement. The explanation addresses what the authority described as "material changes" as part of the analysis of operations and results in the annual report. The analysis also extends to trends expected to affect the company in the future, alongside material sources of uncertainty associated with them. This part of the disclosure includes a discussion of factors affecting the company's future, as well as an explanation of shifts that have already occurred in its business and performance. The proposed content thus combines an explanation of changes in the company's business with a discussion of trends and uncertainties that management expects to affect its trajectory.
On financial position, the proposal includes a comparison of liquidity and the ability to meet obligations with the previous financial year, according to the authority. The comparison also covers the company's financial position and funding sources, as part of the discussion presented by the board in its annual report. The proposal also calls for addressing financial and non-financial performance indicators when they are material to analysing the company's business and results. Indicators cited by the authority include profit margins, returns and growth, alongside indicators related to operating efficiency. This proposed scope places profitability and operating performance indicators within the analysis, alongside the annual comparison of liquidity, obligations and the funding sources on which the company relies.
On implementation, the authority proposes requiring main-market companies to comply with the provisions starting with the first board report issued after the proposal is approved. The start of mandatory compliance for these companies is tied to the issuance of the report after approval, under the implementation mechanism the authority has put forward for consultation. On the parallel market, the authority proposes that the provisions initially apply on a voluntary basis before becoming mandatory. Companies on this market would be required to comply starting with the first annual report issued in the year following the year in which the provisions are approved. The proposal thus sets out different implementation paths linked to the timing of approval of the text and the issuance of annual reports on the main and parallel markets.
The proposal follows amendments previously approved by the authority to the instructions governing company announcements, which took effect on 1 January 2024. Those instructions specify the basic elements companies must include in announcements published on the Saudi Exchange website. This framework concerns the content of announcements companies publish through the exchange's website, according to the authority's statement on the approved amendments. The current proposal addresses disclosures within the annual board report, specifically the management discussion of financial performance section. In addition to consolidating existing provisions, the proposal adds requirements to analyse operations, results and financial position, the topics the authority has identified for the proposed section of the report.
In a separate regulatory initiative, the authority put forward a proposal to require main-market companies to hold earnings calls 2 times a year. According to the announcement of that proposal, the call would be held within 5 business days of the financial results announcement, after the market closes. The proposal calls for the presentation used during the call to be made available immediately to all investors through the company's website. It also includes making a recording of the call available on the same website, so that investors can access both the presentation and the recorded call. The authority proposed that these provisions take effect from the announcement of annual results for the 2026 financial year, according to the timeline set out in the proposal governing earnings calls.
The consultation on the earnings calls proposal closes on 29 October 2026, according to the deadline announced by the Capital Market Authority for that proposal. The consultation on enhancing disclosures in annual board reports runs until 20 November 2026. Comments on enhancing the report are to be submitted through the Saudi Competitiveness Center's Istitlaa platform, under the participation mechanism specified by the authority. The authority will study the comments received before approving the proposal's final wording, ahead of the proposed start of implementation for companies. Mandatory compliance remains contingent on approval of the provisions and then on the timing of board reports under the proposed arrangements for each market.