Corporate Governance in MENA by OECD

Author:OECD
Language: eng
Format: epub
Tags: industry/governance
Publisher: OECD Publishing
Published: 2019-04-15T00:00:00+00:00

Ultimate beneficial ownership (through deemed and indirect ownership) should be disclosed

Beneficial owners who have crossed the 5% threshold through “acting in concert”, “trust” or “control enhancing” arrangements should disclose their beneficial ownership position.

It is also good practice to disclose the shareholdings of directors regardless of the percentage they own. This is not always the case in the region.

Regarding the time allowed for disclosure, changes in major ownership interests should be disclosed as soon as the defined thresholds have been exceeded. And as for timely access to material information by all stakeholders, and not just the securities regulator, companies should be required to make all disclosures available on their websites.

Regulatory authorities should also strive to increase the quality of disclosure. Companies in the region sometimes engage in “grudging” or “boilerplate” compliance, creating the appearance of disclosure while concealing the true nature of ownership. The OECD suggests that a good way to prevent this is to require visually accessible charts and figures in disclosure of beneficial ownership and control structures (OECD, 2017b).

Competent authorities also need access to up-to-date beneficial ownership information in order to fulfil their supervisory, monitoring and enforcement tasks. Recommendations by international organisations include creating a central beneficial ownership register and establishing information-sharing mechanisms.

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