Financial Crime World

Financial Regulatory Framework in Oman: Recent Developments

Overview

The financial regulatory framework in Oman has undergone significant changes in recent years, with a focus on aligning with international standards and promoting a more attractive investment environment. The following are key developments that have shaped the current regulatory landscape.

Capital Markets Authority (CMA)

  • Established: To regulate and develop the capital markets in Oman
  • Responsibilities:
    • Licensing of securities activities
    • Mergers and acquisitions
    • Disclosure of interest
    • Investment fund promotion
    • Regulating the Kuwait Stock Exchange

Corporate Governance Rules

The CMA has issued comprehensive corporate governance rules covering aspects such as:

  • Board composition
  • Risk management
  • Corporate social responsibility for CMA-regulated entities

Anti-Money Laundering (AML) Law

Introduced in 2013, the AML Law aims to combat money laundering and financing of terrorism by creating a fully-independent Financial Intelligence Unit (FIU) to investigate suspected proceeds of money laundering or monies used to finance terrorism.

Central Bank of Oman (OCB)

  • Established: In 1974 with full banking status, administrative independence, and financial autonomy
  • Main objectives:
    • Promoting the development of banking institutions
    • Maintaining financial stability
    • Issuing currency
    • Participating in international monetary organizations

Key Functions of OCB

The OCB acts as:

  • Depository bank for the Government of Oman and its institutions
  • Controller of licensing of banking sector with a broad definition of “banking business”
  • Regulator of activities such as:
    • Receiving deposits
    • Opening current accounts
    • Loaning money on personal or real property security
    • Operating credit card businesses
    • Issuing letters of guarantee and letters of credit

Committees for Harmonization

The OCB and CMA have formed committees to ensure harmonization of laws and regulations regulating the financial market in Oman.

Amendment to Anti-Money Laundering Law

The Anti-Money Laundering and Combating Terrorism Law has been amended to permit provision of Islamic financing products, making Oman the last country in the GCC to regulate Islamic financing transactions.