New Financial Services Authority established in Oman to regulate services

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In a significant new development in Oman, a new regulatory body, the Financial Services Authority (the FSA), has been established pursuant to Royal Decree 20/2024 (RD).

Under the decreee, which came into force on March 25, the FSA is mandated to replace the Capital Market Authority in Oman, in its entirety.

What changes?

Article III of the RD provides, amongst others, that “all allocations, assets, rights, obligations and holdings of the Capital Market Authority are hereby transferred to the Financial Services Authority” and Article VII of the RD further provides that all references to “Capital Authority Market” in other laws and royal decrees are replaced accordingly.

It is also worth noting that the competences of the Ministry of Commerce, Industry and Investment Promotion to regulate the accounting and auditing profession are now transferred to the FSA as well, pursuant to the RD.

The implementing regulations for the RD setting out the FSA’s roles and responsibilities and other specific details are expected to be published on March 31.

This is certainly a ground-breaking change in the Omani financial markets and one to watch out for.

Parties currently engaged in any transactions with Omani entities where the Capital Market Authority is involved as regulator should be aware of this development and look out for any potential impact.

“It needs to be assessed how this change will practically play out and if the FSA will be mandated with a wider supervisory role than its predecessor, such as overseeing the market for virtual currencies and crypto assets”, commenting on the development noted legal firm, Trowers and Hamlins.

His Majesty Sultan Haitham bin Tarik issues three Royal decrees. The first conducts amendments to the Criminal Procedures Law. The second promulgates Sultan Qaboos University System. The third establishes the Financial Services Authority. pic.twitter.com/mflg0kuP3I

— Oman News Agency (@ONA_eng) March 25, 2024

Services under Oman’s Financial Services Authority:

Royal Decree No 20/2024 establishes the Financial Services Authority and promulgates its system.

1. Article 1 stipulates that an authority named the ‘Financial Services Authority’ will be established and that it will have legal personality, financial and administrative independence.
2. The Financial Services Authority will report to the Council of Ministers and it will be governed by the provisions of the system attached to this decree.
3. Article 2 states that the Financial Services Authority will have its headquarters in the Governorate of Muscat and that, by virtue of a decision from the authority’s Board of Directors, it may establish branches in other governorates.
4. Article 3 stipulates that all allocations, origins, rights, obligations and assets of the Capital Market Authority will be transferred to the Financial Services Authority, and that all employees of the Capital Market Authority will be transferred to the Financial Services Authority, along with their financial grades.
5. Article 4 instructs the Chairman of Board of Directors of the Financial Services Authority to issue the regulations and decisions necessary for the implementation of provisions of the system attached.
6. It states that, till such time, the current laws, regulations and decisions will continue to be applied without prejudice to the provisions of the system attached.
7. Article 5 states that the speciality of regulating the profession of accounting and auditing will be transferred from the ‘Ministry of Commerce, Industry and Investment Promotion’ to the ‘Financial Services Authority’.
8. Article 6 states that the phrase ‘Financial Services Authority’ will replace the phrases ‘Ministry of Commerce, Industry and Investment Promotion’ and ‘Section of Professions and Crafts at the Department of Corporate Affairs at the Ministry of Commerce, Industry and Investment Promotion’, ‘Director General of Directorate General of Commerce’ – wherever quoted in the law regulating the profession of Accounting and Auditing issued pursuant to Royal Decree No 77/86.
9. Also, the phrase ‘Minister of Commerce, Industry and Investment Promotion’, wherever quoted in the aforementioned law regulating the Profession of Accounting and Auditing will be replaced by the phrase ‘Chief Executive Officer of the Financial Services Authority’.
10. The Board of Directors of the Financial Services Authority will undertake to structure the committee referred to in Article 24 of the law regulating the Profession of Accounting and Auditing, provided that the committee will have two or more accountants as members.
11. Article 7 replaces the phrase ‘Capital Market Authority’, wherever quoted in laws and Royal Decrees with the phrase ‘Financial Services Authority’.
12. Also, the phrases ‘Chairman of the Board of Directors of the Capital Market Authority’ and ‘Chief Executive Officer of the Capital Market Authority’ will be replaced, wherever quoted in laws and Royal Decrees with the phrases ‘Chairman of Board of Directors of the Financial Services Authority’ and ‘Chief Executive Officer of the Financial Services Authority’.
13. Article 8 cancels all that contradicts this decree or the system attached to this decree or contravenes their provisions.

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