Major Shareholders Reports, Material Disclosures, and Periodic Reports

Introduction

Disclosure and transparency are the two fundamental pillars of efficient financial markets and key elements in sound corporate governance. In the context of shareholder registry management, reports and disclosures related to ownership gain special importance, as they enable investors, regulators, and the public to understand the company’s ownership structure, track material changes within it, and make informed investment decisions.

Saudi legislation—led by the Capital Market Law, its implementing regulations, and the Corporate Governance Regulations—imposes an integrated system of mandatory disclosures related to ownership, varying between periodic, immediate, and exceptional. Shareholders holding certain percentages are required to continuously disclose their ownership, and companies are required to publish comprehensive periodic reports on shareholder structure.

In this article, we review all types of reports and disclosures related to ownership in the Saudi market, focusing on detailed requirements, responsibilities, and practical procedures for preparing and submitting them.

 

Part One: The Importance of Ownership-Related Disclosure

Before detailing the types of disclosures, it is useful to understand the reasons that make these disclosures necessary and valuable:

1. Investor Protection

Disclosure enables investors to know the ownership structure, who actually controls the company, and who has the ability to influence its decisions. This information is essential for making informed investment decisions.

2. Preventing Trading Based on Inside Information

Immediate disclosure of ownership changes reduces information gaps between traders and prevents a limited category from benefiting from information at the public’s expense.

3. Enhancing Market Trust

Transparency in ownership enhances domestic and foreign investor confidence in the financial market and attracts capital for investment.

4. Detecting Ownership Concentration and Its Effects

Disclosure enables monitoring of ownership concentration in the hands of a limited group and the risks that may result on minority rights or share liquidity.

5. Monitoring Acquisitions and Mergers

Early disclosure of accumulating certain percentages of shares enables monitoring of acquisition attempts and application of governing rules.

6. Combating Money Laundering

Disclosure of ultimate beneficial owners contributes to combating money laundering and terrorism financing in accordance with international standards.

7. Compliance with International Standards

Advanced disclosures contribute to classifying the Saudi market among emerging and developed markets in international indicators, attracting foreign investment.

💡 Pivotal Information According to Capital Market Authority indicators, ownership-related disclosures are among the most impactful disclosures on investor trust, and the most transparent companies in this aspect typically achieve higher valuations and better long-term investment returns.

 

Part Two: The Regulatory Framework for Disclosures

Ownership-related disclosures in Saudi Arabia are subject to an integrated system of legislation and regulations:

1. The Capital Market Law

The Capital Market Law issued by Royal Decree No. (M/30) regulates the general framework for market disclosures and defines the basic authorities of the Capital Market Authority in regulating these disclosures.

2. The Rules on the Offer of Securities and Continuing Obligations

These rules specify the mandatory details of disclosures that listed companies must comply with continuously, including:

• Immediate disclosures of material information.
• Periodic disclosures (quarterly, semi-annual, annual).
• Disclosures specific to ownership.
• Disclosures in specific cases (acquisition, merger, etc.).

3. The Corporate Governance Regulations

These specify additional disclosure requirements, especially in matters related to ownership structure, related-party transactions, and management remuneration.

4. The Regulation on Related Persons

This relates to the disclosure of ownership by persons related to the company, such as board members and senior executives.

5. Acquisition and Merger Rules

These specify disclosure requirements specific to acquisition operations upon exceeding certain percentages of ownership.

6. The Market Conduct Regulation

This relates to disclosures associated with combating trading based on inside information and protecting the market from manipulation.

 

Part Three: Types of Ownership-Related Disclosures

1. Company Disclosures About Ownership Structure

The company is required to publish periodic information about its ownership structure. The most prominent of these disclosures are:

The Monthly Major Shareholders Report

A monthly report published via the “Tadawul” platform with the names of shareholders owning 5% or more of the listed company’s capital, along with details of their ownership.

• Includes names of major shareholders.
• Ownership percentage of each.
• Changes since the previous report.
• Date of the report.

Disclosure in the Annual Report

The board’s annual report must include detailed information about the ownership structure:

• List of major shareholders.
• Ownership percentage of each category (individuals, institutions, government, foreigners).
• Ownership of board members and senior executives.
• Changes in ownership during the year.
• Information about treasury shares (if any).
• Employee shares and incentives.

Disclosure of Ultimate Beneficial Owners

Within the framework of international efforts to combat money laundering, disclosure of ultimate beneficial owners from company ownership is required. This is a service provided by the Ministry of Commerce through its electronic platforms.

2. Shareholders’ Disclosures About Their Ownership

Shareholders holding certain percentages are required to continuously disclose their ownership and changes thereto:

Disclosure of 5% or More Ownership

Every person (natural or juridical) who becomes the owner of 5% or more of the capital of a listed company must disclose this within a specified period. The disclosure obligation continues upon:

• Reaching 5% for the first time.
• Each change of 1% (increase or decrease) or more thereafter.
• Falling below 5%.

Disclosure Data

• Owner’s name and information.
• Type of owner (individual, company, government, foreign).
• New ownership percentage.
• Change in percentage.
• Date and reasons for change.
• Whether ownership is direct or indirect.

Senior Officials Disclosure

Board members and senior executives in the listed company must disclose:

• Their personal share ownership.
• Ownership of their first-degree relatives.
• Ownership of companies they control.
• Every change in these ownerships.

3. Immediate Disclosures

In certain cases, disclosure must take place immediately and without delay, including:

Acquisition and Merger Deals

• Announcement of intention to acquire.
• Full deal details.
• Related parties.
• Terms and stages.
• Required approvals.

Changes in Control

• Cases where control of the company changes.
• Sale of large stakes that may affect the management structure.
• Alliances between shareholders.

Related-Party Transactions

• Transactions in which a board member or major shareholder has an interest.
• Transaction details and value.
• Nature of interest.
• Approvals from competent authorities.

 

Part Four: Periodic Ownership-Related Reports

Listed companies are required to publish a set of periodic reports that include information about ownership:

1. The Quarterly Report

Published every three months and includes—regarding ownership:

• Interim financial statements.
• Material changes in ownership structure.
• Interim distributions if any.
• Any other material information.

2. The Semi-Annual Report

Published after the end of the first half of the fiscal year, including broader details than the quarterly report:

• Reviewed semi-annual financial statements.
• Analysis of company performance.
• Changes in ownership structure.
• Disclosures related to related parties.

3. The Annual Report

The most comprehensive and detailed report, considered the primary reference for understanding the company. Regarding ownership, it includes:

• Audited financial statements.
• Comprehensive board report.
• Detailed ownership structure.
• List of major shareholders.
• Ownership of board members and executive management.
• Changes in ownership during the year.
• Related-party transactions.
• Dividend distributions.
• Governance policies.

4. The Monthly Major Shareholders Report

Published monthly mandatorily via the “Tadawul” platform, including:

• List of shareholders owning 5% or more.
• Percentage owned by each.
• Change since the previous report.
• Date of the report.

 

Part Five: Disclosures Related to General Assemblies

General assemblies require a set of disclosures related to ownership:

1. Before the Assembly

• Disclosure of the assembly invitation with the agenda.
• Publication of documents related to proposed resolutions.
• Disclosure of any related-party transactions submitted for approval.
• Disclosure of remuneration and compensation policies.
• Disclosure of board member nominations and their CVs.

2. During the Assembly

• Providing the attendance list and number of shares represented.
• Clarifying the legal quorum.
• Disclosing voting results in real time.
• Documenting objections and reservations.

3. After the Assembly

• Immediate disclosure of assembly results.
• Publication of assembly minutes and approved resolutions.
• Disclosure of approved distributions and their dates.
• Publication of bylaws amendments (if any).

 

Part Six: Disclosures in Special Cases

1. Capital Increase

Upon a decision to increase capital, several disclosures are required:

• Announcement of the increase decision and its reasons.
• Mechanism of the increase (public offering, private, preemption rights).
• Issue price.
• Implementation timeline.
• Impact of the increase on ownership structure.
• Detailed offering prospectus.

2. Capital Reduction

• Announcement of the reduction decision and justifications.
• Reduction mechanism.
• Reduction percentage.
• Impact of reduction on shareholders.
• Required approvals.

3. Acquisition and Merger

• Intention to acquire or merge.
• Deal details.
• Regulatory approvals.
• Impact on shareholders.
• Offer terms.

4. Treasury Share Purchase

• Purchase decision and its objectives.
• Target purchase volume.
• Price or price range.
• Implementation period.
• Uses of shares after purchase.
• Periodic reports on implementation.

5. Dividend Distributions

• Announcement of the distribution decision.
• Share’s portion of the distribution.
• Governing dates (record, due, payment).
• Disbursement mechanism.
• Undisbursed profits from previous distributions.

 

Part Seven: Approved Disclosure Channels

To ensure information reaches all market participants in a synchronized manner, official approved disclosure channels have been specified:

1. The “Tadawul” Platform

The first official channel for disclosures in the Saudi Capital Market. All listed companies must publish their disclosures through it before any other means.

• Provides public access to all investors.
• Ensures unified disclosure timing.
• Permanently documents disclosures.

2. Company Website

A dedicated investor relations page must be available, including:

• All official disclosures.
• Periodic financial reports.
• Information about ownership structure.
• Contact information for investor relations.

3. The “Tadawulaty” Platform

A platform for investors to view their portfolios and receive disclosures associated with shares they own.

4. Media Channels

In some cases, disclosures require publication in local newspapers or other media channels, especially for general assemblies in unlisted companies.

5. Ministry of Commerce Reports

For unlisted companies, some disclosures are submitted via Ministry of Commerce electronic platforms.

 

Part Eight: Disclosure Responsibilities and Roles

1. The Board of Directors

• Approving disclosure policies.
• Overseeing their implementation.
• Approving material disclosures.
• Ensuring accuracy of disclosed information.

2. Audit Committee

• Reviewing financial disclosures before publication.
• Verifying their compliance with accounting standards.
• Monitoring the integrity of disclosure operations.

3. Board Secretary

• Coordinating preparation of disclosures.
• Overseeing their timely publication.
• Communicating with regulatory authorities.
• Coordinating with investor relations.

4. Investor Relations Department

• Preparing disclosure content.
• Communicating with investors and analysts.
• Responding to inquiries.
• Developing communication channels.

5. Financial Management

• Preparing financial statements.
• Verifying the accuracy of numbers.
• Providing required analyses.

6. Legal Management

• Reviewing disclosures from a legal standpoint.
• Ensuring compliance with regulatory requirements.
• Handling legal risks.

 

Part Nine: Common Challenges in Disclosure

1. Precise Timing

Challenge: Executing disclosure at the required time, especially for unexpected material events.

Solution: Internal alert system, teams ready for rapid response, simplified procedures for emergency cases.

2. Information Accuracy

Challenge: Ensuring accuracy of all disclosed information.

Solution: Multiple verification operations, legal and financial review, complete documentation of sources.

3. Balancing Transparency and Confidentiality

Challenge: Disclosing material information without revealing sensitive trade secrets.

Solution: Clear policies for distinction, legal consultations, adherence to the minimum required.

4. Dealing with Rumors

Challenge: Responding to rumors and inaccurate information in the market.

Solution: Clear response strategy, quick disclosure to correct information, maintaining trust.

5. Multilingual Disclosure

Challenge: Providing disclosures in both Arabic and English with full alignment.

Solution: Specialized translation teams, careful review, simultaneous publication.

6. System Integration

Challenge: Coordinating between the company’s internal systems and official disclosure systems.

Solution: Robust technical integration, unified procedures, specialized training.

 

Part Ten: Penalties for Violations

Regulatory authorities impose strict penalties on violations related to disclosure:

Type of Violation	Potential Penalty
Delay in disclosure	Warning + financial fine
Disclosure with inaccurate information	Large fine + immediate correction
Concealing material information	Aggravated fines + civil liability
Trading before disclosure	Fines + criminal prosecution
Repeated violations	Increased fines + harsher procedures
Intentionally misleading disclosures	Criminal prosecution + civil compensation

In addition to regulatory penalties, those harmed by violations have the right to file civil claims for compensation.

 

Part Eleven: Best Practices in Disclosure

1. Proactivity: Proactively disclose important information before it reaches the market through other means.
2. Comprehensiveness: Providing comprehensive information that meets investor needs, not just complying with the minimum requirements.
3. Clarity: Using clear and understandable language, away from deliberate complexity.
4. Timing: Disclosing at the right time, without unjustified delay and without haste that harms accuracy.
5. Standardization: Using unified forms and templates for disclosures to facilitate comparison across periods.
6. Follow-up: Committing to following up on previous disclosures and providing updates when needed.
7. Full Transparency: Not hiding negative information or beautifying it.
8. Consistency: Applying the same disclosure standards in all cases, without selectivity.
9. Multiple Channels: Using multiple channels to deliver information to all investor segments.
10. Continuous Improvement: Developing disclosures based on investor feedback and international practices.

 

Ownership-Related Disclosure Checklist

Daily / Periodic Disclosures

• Tracking any ownership changes requiring disclosure.
• Tracking material events at the company.
• Readiness of investor relations teams to respond.

Monthly Disclosures

• Preparing the major shareholders report.
• Verifying data from the registry.
• Publication on the Tadawul platform on time.

Quarterly Disclosures

• Interim financial statements.
• Analysis of material changes.
• Handling related parties.
• Review by financial management and the auditor.

Annual Disclosures

• Comprehensive annual report.
• Audited financial statements.
• Governance report.
• Detailed ownership structure.
• Related-party transactions.

Exceptional Disclosures

• Readiness for immediate disclosure of material information.
• Approved procedures for acquisition and merger.
• Procedures for capital increases and reductions.
• Procedures for treasury share purchases.

Readiness and Compliance

• Written and approved disclosure policies.
• Teams trained on disclosure requirements.
• Technical systems for managing disclosures.
• Regular relations with regulatory authorities.
• Periodic review of practices.

 

Conclusion and Key Takeaways

Ownership-related disclosures are not merely regulatory obligations but a strategic tool for building trust in the company and enhancing its market reputation. Companies that excel in disclosure gain a real competitive advantage that reflects in the cost of capital and their ability to attract investors.

The role of the shareholder registry in this system is pivotal, as it is the primary source for most information that is disclosed. An accurate and up-to-date registry is the pillar for correct and reliable disclosures, and delays in updating it or errors in its data translate directly into disclosure violations that may entail penalties.

With the evolution of financial markets and increasing transparency requirements at the international level, investment in developing the disclosure system becomes an indispensable necessity for every company aspiring to success and sustainability. This requires a comprehensive vision combining regulatory, technical, and human aspects, with continuous improvement based on international best practices.

🎯 Core Takeaways 1) Disclosures divide into: company disclosures about ownership, shareholders’ disclosures about their ownership, and immediate disclosures. 2) The monthly major shareholders report (5%+) is mandatory via the Tadawul platform. 3) The shareholder must disclose upon reaching 5% and upon every 1% change thereafter. 4) Official channels: Tadawul platform, company website, Tadawulaty. 5) Responsibility is distributed between: the board, audit committee, secretary, investor relations, finance, and legal. 6) An accurate shareholder registry is the pillar of correct disclosures. 7) Proactive transparency wins investor trust and reduces regulatory risks.

FAQ

What is the monthly major shareholders report and who must publish it?

The monthly major shareholders report is a mandatory disclosure that every company listed on the Saudi Exchange (Tadawul) must publish each month through the official Tadawul platform. It identifies all shareholders who own 5% or more of the company's capital, specifying each shareholder's name, ownership percentage, and any change since the previous report. The report must be published before any other communication channel is used, ensuring all market participants receive the information simultaneously. Its purpose is to allow investors to monitor concentration of ownership in real time, detect potential acquisition activity, and make more informed investment decisions. Any delay in its publication exposes the company to warnings and financial penalties from the Capital Market Authority.

When must a shareholder disclose their ownership percentage to regulators?

A shareholder is required to file a disclosure with the Capital Market Authority in three scenarios. First, when they reach 5% or more of a listed company's capital for the first time—this triggers an initial disclosure within the specified regulatory deadline. Second, following that initial disclosure, every time their ownership changes by 1% or more in either direction—whether an increase or decrease—an updated disclosure is required. Third, when their ownership falls below 5%, a final disclosure confirming the exit from the threshold is required. Each disclosure must specify the shareholder's identity and type, the new ownership percentage, the nature and date of the change, and whether the ownership is held directly or indirectly. These requirements apply equally to natural persons, companies, and government entities.

What are the penalties for disclosure violations in the Saudi capital market?

The Capital Market Authority imposes a graduated penalty structure based on the severity of the violation. A delay in filing a required disclosure results in a formal warning accompanied by a financial fine. Submitting a disclosure containing inaccurate information triggers a larger fine plus an obligation to publish an immediate correction. Concealing material information—such as failing to disclose a crossing of the 5% ownership threshold—carries aggravated fines and exposes the company to civil liability claims from investors who suffered losses as a result. Trading in the company's shares before a material disclosure is filed constitutes a potential insider trading offence subject to both financial penalties and criminal prosecution. Intentionally misleading disclosures carry the most severe consequences, including criminal prosecution and civil compensation to affected parties. Repeated violations result in multiplied penalties across all categories.

Conclusion of Topic One

With this article, we conclude Topic One, which addressed shareholder registry management in its various aspects. In this topic, we have explored:

11. The concept of the shareholder registry, its importance, and its regulatory framework.
12. Its core components, share types, and associated rights.
13. The shareholder lifecycle from registration to disposition.
14. Continuous updating and maintenance.
15. Digitization and advanced electronic systems.
16. Handling ownership changes in their various forms.
17. Dividend distributions and their relationship to the registry.
18. Protection of minority shareholders’ rights.
19. Data confidentiality and privacy protection.
20. Reports and disclosures related to ownership.

This solid foundation in understanding the shareholder registry forms the first pillar of sound corporate governance. In subsequent topics, we will move to other complementary subjects, including general assemblies, boards of directors, specialized committees, and practices in in-person and electronic meetings.

 

References and Sources

• The Capital Market Law issued by Royal Decree No. (M/30) and its Implementing Regulations.
• The Rules on the Offer of Securities and Continuing Obligations, Capital Market Authority.
• The Corporate Governance Regulations, Saudi Capital Market Authority.
• The Regulation on Related Persons, Capital Market Authority.
• Acquisition and Merger Rules, Capital Market Authority.
• The Market Conduct Regulation, Capital Market Authority.
• Official website of the “Tadawul” platform – saudiexchange.sa
• Official website of the Securities Depository Center (Edaa).
• OECD Principles on Disclosure and Transparency.