Clients & friends newsletter - Saudi Arabia

Saudi Arabia Additional Filings Required for Each Offer of Equity Awards to New Employees Companies are required to complete a notification filing with the Capital Markets Authority (the “CMA”) in connection with the offering of equity awards to employees in Saudi Arabia. The notification filing must be made through an “authorized person,” i.e., an entity licensed to engage in securities activities in Saudi Arabia. The company and the authorized person must notify the CMA at least ten days in advance of the proposed date of the offer using prescribed forms. If the CMA does not make an inquiry during the ten days leading up to the proposed date of the offer, the offer may proceed as planned. As previously reported our September 2014 Client and Friends Newsletter, the CMA initially required these notifications be filed annually, but then extended the notification period to up to three years for a number of applicant companies, which was viewed as positive news. However, the CMA has now clarified that the extended notification period applies only to offerings to employees covered by the initial notification. This means that, if a company intends to grant awards to a new employee (or a newly eligible employee) not covered by the initial notification, the CMA will expect a new notification filing. This effectively negates the benefit of the extended notification period, because most companies will regularly grant awards to new employees. As a result, most companies likely will want to return to making annual notification filings (and, possibly, even more frequent notifications, especially for companies that offer an ESPP with multiple offerings per year). If your company offers equity awards to employees in Saudi Arabia, please contact your GES attorney for more information on complying with the securities laws. For more information: • Narendra Acharya • June Anne Burke • Edward Burmeister • Valerie Diamond • Denise Glagau • Barbara Klementz • Aimee Soodan • Brian Wydajewski Learn more about our Global Equity Services Practice © Baker & McKenzie LLP Global Equity Services | www.bakermckenzie.com/ges