Saudi Capital Market Authority seeks feedback on new disclosure rules for annual reports

The Capital Market Authority has called on all stakeholders and participants in the financial market to submit their feedback on a draft project aimed at enhancing disclosure in the management discussion section of the annual board report. The consultation period will last 30 days, ending on 10 Jumada II 1448 AH, corresponding to November 20, 2026.

According to a statement from the authority on its X platform, the project aims to strengthen governance, transparency, and disclosure standards among listed companies, and to improve the quality of financial and operational information available to shareholders and potential investors. This will enable them to better analyze company performance, business results, and financial positions, supporting more informed investment decisions.

The project includes developing existing regulatory provisions related to financial and operational performance disclosure by consolidating and organizing them into a dedicated section of the annual board report, titled “Discussion and Analysis of Financial and Operational Performance and Financial Position.” It also introduces several requirements designed to enhance the comprehensiveness and quality of disclosures, and to facilitate investors’ access to, analysis of, and comparison of relevant information, providing a clearer picture of company performance and influencing factors.

Key features of the project include specifying the minimum content required in the dedicated section, such as analysis of company performance, business results, financial position, liquidity, and financial information related to audited statements. It also requires explanations of the reasons and drivers behind significant changes and the main factors affecting them, as well as a review of trends, factors, and material uncertainties expected to impact the company’s future operations, results, and financial position.

The proposed requirements cover analysis of financial and operational performance during the fiscal year, key performance indicators, and analysis of liquidity, solvency, financial position, and capital resources compared to the previous fiscal year. This aims to enhance investors’ ability to understand company performance developments and evaluate business results.

Regarding key performance indicators, the project proposes that, where relevant, analysis should be based on both financial and non-financial indicators, which may include profit margins, return on capital or equity, revenue and profit growth rates, operational efficiency metrics, and other indicators determined by the company’s business nature.

The project proposes that compliance will be mandatory for all companies listed on the main market starting from the first board report issued after the approval of the proposed regulatory provisions. For companies listed on the parallel market, the requirements will be advisory at first, becoming mandatory from the first annual board report issued in the year following the adoption of the provisions.

This project is part of broader regulatory initiatives by the authority aimed at enabling investors to exercise their rights more effectively and increasing their participation in general assemblies. The authority will announce any further regulatory developments on the matter once finalized.

The Capital Market Authority confirmed that all feedback and comments received from the public will be carefully reviewed to finalize the draft project for enhancing disclosure in the management discussion section of the annual board report. Comments can be submitted via the unified electronic platform for public and government feedback, managed by the National Competitiveness Center, “Istitlaa,” during the consultation period at: istitlaa.ncc.gov.sa