Did you lose money in an investment portfolio because of something your brokerage did, buy shares on the strength of information that turned out to be misleading, or find your orders were not executed as instructed? These are securities disputes. They are not heard by the general courts but by a specialised judicial body linked to the Capital Market Authority (CMA), the regulator of the Saudi capital market. This guide explains what these disputes are, where they are filed, and the practical steps.
Who hears securities disputes?
The Committee for the Resolution of Securities Disputes (لجنة الفصل في منازعات الأوراق المالية) has jurisdiction over disputes arising from the application of the Capital Market Law (نظام السوق المالية) and its implementing regulations. Its decisions can be challenged before the Appeal Committee for the Resolution of Securities Disputes (لجنة الاستئناف في منازعات الأوراق المالية). Its jurisdiction covers civil disputes between investors and licensed firms, as well as claims linked to breaches of the market rules.
Examples of securities disputes
| Dispute | Example |
|---|---|
| With brokerages and other licensed persons | Trades executed without an order, a portfolio managed contrary to the agreement, or negligent execution |
| With listed companies | Loss caused by misleading material information or incomplete disclosure |
| Investment funds | Disagreement over valuation, redemption or fees |
| Compensation for violations | Loss caused by insider trading or market manipulation |
Practical steps
- Gather your documents: the account opening or portfolio management agreement, account statements, buy and sell orders, and correspondence.
- Complain to the licensed firm itself and keep its reply.
- Complain to the Capital Market Authority: in many cases, a complaint must first be filed with the CMA before a claim can be brought before the Committee.
- File a claim before the Committee if the dispute is not resolved, keeping the statutory time limits in mind.
The conditions for a claim to be accepted, and its time limits, are set by the Rules of Procedure for Securities Disputes, so check the current official text.
Proceedings are conducted in Arabic, so agreements and correspondence in English will need an Arabic translation. The firm can advise you in English.
Before complaining: the documents you need
- Portfolio statements and the buy and sell orders in dispute.
- Your agreement with the broker or investment manager.
- Messages and recordings proving the promise, recommendation or error.
- Your earlier complaint to the firm and its reply; many procedures start there.
- A clear calculation of the loss you claim and how it happened.
Frequently asked questions
I lost money in the market. Am I entitled to compensation?
A loss alone does not give a right to compensation, because investing carries risk. The right arises where a licensed firm or listed company committed a violation or failure that caused your loss.
Do I need a lawyer before the Committee?
It is not required, but these disputes are technical and depend on a careful reading of agreements and records. A lawyer helps build the claim and quantify the compensation.
An unlisted company promised me returns. Does the Committee have jurisdiction?
It depends on the nature of the activity and the entity involved. Offering securities or managing money without a licence is a violation in itself. Take advice before any step.
In a capital market dispute?
The Usus Law Firm team handles securities disputes and representation before quasi-judicial committees, in Riyadh and Tabuk.
This article is general legal information and is not a substitute for advice on your specific case. Court proceedings in Saudi Arabia are in Arabic; the official Arabic text of each law prevails.
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