نحو سوق مالي أقوى: لماذا نحتاج إلى هيئة «حماية المساهمين»

The tweet from Professor Khalid Al-Shathri, in which he questioned: “There is an official body called (Consumer Protection), why isn’t there an official body named ‘Shareholder Protection’?” touches on a fundamental need in the development of the Saudi financial market.

This simple question carries a profound vision related to market fairness and enhancing trust in it, especially for the small shareholder who forms the backbone of the economy and drives the ambitious development vision.

With the significant growth of the financial market and the expansion of the base of individual investors, this proposal transforms from an idea into a necessity to ensure sustainable growth and protect gains.

The protective gap between the consumer and the shareholder:

The “Consumer Protection” authority is a fundamental pillar in any modern economy, as it protects individuals from fraud and exploitation in their daily transactions related to goods and services.

It monitors prices, receives complaints, ensures product quality, and safeguards consumer rights in contracts and information.

This same protective principle is what Professor Khalid Al-Shathri calls for to be applied in the field of investment in stocks, bonds, and securities.

The shareholder, especially the small one, is essentially a “consumer” of a complex and risky financial product, facing specific challenges:

First, equal opportunity in information:

Do all shareholders, large and small, receive critical financial information simultaneously and clearly? Information is the lifeblood of the market, and any delay in its publication or lack of transparency undermines the principle of fairness and exposes the small shareholder to unjustified losses.

Second, protection from manipulation and unfair practices: How can the small shareholder ensure that there is no trading based on insider information, or artificially inflated stock prices (known as ramping), or organized smear campaigns targeting a company with the aim of buying its shares at low prices?

Third, clarity of procedures and fees:

Are all categories of shareholders aware of the true costs of transactions and various fees transparently? Are the procedures related to basic shareholder rights, such as voting in general assemblies or receiving dividends, simplified and easily accessible and understandable?

Fourth, a unified and effective platform for complaints and disputes:

Where does a shareholder go if they feel wronged or discover a violation? The existence of an independent body specialized in receiving complaints, investigating them, and resolving disputes quickly and fairly is vital for maintaining trust in the market.

Tasks of the Shareholder Protection Authority.. A practical vision:

Establishing an independent official body called “Shareholder Protection,” or enhancing the powers of an existing body such as the Saudi Capital Market Authority (CMA) with a clear focus on protecting the small shareholder, can achieve important goals through several key roles:

1. Enhancing oversight on disclosure and transparency: Ensuring that important and sensitive information is published to all shareholders simultaneously and in a clear and easily understandable manner, while monitoring the accuracy of financial data issued by listed companies.

2. Firm confrontation of disruptive practices: Immediate and effective investigation into suspicions of trading based on insider information, stock price manipulation, or any form of financial fraud within the company that harms shareholders, and imposing deterrent penalties commensurate with the severity of the violation.

3. Simplifying procedures and safeguarding basic rights: Monitoring the commitment of listed companies to fair and clear procedures towards all their shareholders, especially the small ones, regarding voting rights, dividend distribution, subscription rights, and ensuring ease of exercising these rights without obstacles.

4. Launching a strong and independent complaints platform: Providing an easily accessible and responsive channel for shareholders to submit their complaints about any unfair practices they encounter from companies, brokerage firms, or any other parties in the market, ensuring swift consideration and appropriate action.

5. Financial awareness and empowering the investor: Offering intensive and continuous awareness programs for individual investors, aimed at raising their financial literacy, enabling them to understand the nature of risks, their legal rights, and responsibilities, thereby reducing the chances of incurring losses due to ignorance or lack of experience.

The world is moving towards investor protection:

The idea of protecting investors, especially small ones, is not new on the global stage. Strong regulatory bodies such as the U.S. Securities and Exchange Commission (SEC), and many independent committees in European and Asian exchanges, place investor protection at the core of their regulatory and oversight missions. The relative success achieved by these models clearly indicates the effectiveness of having a body that focuses explicitly and directly on this sensitive task, enhancing the attractiveness and stability of markets.

Shareholder protection is a pillar of Vision 2030 and an investment in the future:

The ambitious Vision 2030 of the Kingdom seeks to deepen the financial market and expand the base of local and international investors, establishing “Tadawul” as a leading global financial center.

These lofty goals cannot be achieved without building a solid trust among all categories of investors, especially individuals who represent a vital source of market liquidity and activity.

Establishing a specialized authority for “Shareholder Protection” will send a strong message both within the Kingdom and beyond, indicating that the Saudi financial market is not just a strong market in terms of size and value, but also a market characterized by fairness and transparency that provides effective protection for all participants equally. This protection is not an obstacle to market movement or creativity; rather, it is a fundamental guarantee for the continuity of its growth and stability in the long term, and an integral part of its investment attractiveness.

Professor Khalid Al-Shathri’s tweet was not just a passing question, but a proposal for a necessary proactive vision. Establishing an independent official body or enhancing the powers of existing entities to focus clearly and strictly on “Shareholder Protection”—with special attention to the small shareholder—represents more than just a reaction to scattered complaints.

It is a pivotal strategic step towards building a more mature, fair financial market capable of attracting investments.

It is an investment in the trust of the citizen who has become a partner in development through their investments, and a direct support for the economic journey led by the Kingdom, embodying the principle that the real success of the market is measured not only by the rise of its indicators but also by the fairness of its rules and the strength of its protection mechanisms for those who place their money and trust in its future.

It is time for the shareholder, a partner in development and the economy, to receive the official shield and institutional protection that befits their role and ensures the continuation of their active contribution.