License to exercise one or more of the finance activities in accordance with the finance laws and its regulations. The capital must be paid in full at the establishment of the Financial Company.
Part Four
Part Five
Corporate Governance
Part Six Internal Organizing
All business documents, records and files must be kept in an orderly, transparent and secure manner by the Finance Company. The financing company must have sufficient and qualified personnel in terms of knowledge and experience to meet its operational needs, business activities and risks. The staff's remuneration and incentives must be fair and in accordance with the Financial Company's risk management strategy and must not create conflicting interests.
At least (50%) of all employees of the financing company shall be Saudi nationals when the financing company commences its operations. Recruitment of non-Saudis into the financing company must be limited to jobs that require expertise not available in the Saudi labor market. In all cases, the financing company must obtain a no-objection letter from SAMA before appointing a non-Saudi employee in supervisory departments, provided the company has proven that there is a shortage of Saudi men for the vacant position.
Part Seven Outsourcing
They must be updated and completed and kept for at least ten years from the date of termination of the relationship with the customer. The share of Saudi nationals in the total human resources will increase annually by (5%) of all employees until it is reached (75%). The financial company must check the compliance of the external provider with applicable laws, regulations and instructions.
The Finance Company remains responsible in the event that the outsourcing provider shows a lack of commitment to complying with the applicable laws, regulations and instructions in all operations and tasks assigned to him. The Finance Company must obtain a non-objection letter from SAMA prior to any outsourcing arrangement which, in the event of disruption or other default, may have an impact on the Finance Company's activities, reputation or financial situation, or if the tasks assigned, including the transfer, processing or storage of the data and information of the Borrowers.
Part Eight Risk Management
The financing company must prepare a quarterly risk report for discussion in the risk and credit management committee and the board of directors after review by senior management. A comprehensive overview of the risk development and performance of financial positions associated with market price risks, as well as any cases where the limits have been exceeded. The financial portfolio's results by activity, risk class and size and collateral category;.
Analysis of the conditions in which the Financial Company exceeded the limits and the reasons for them, the scope and development of new business and the creation of provisions for the risks of the Financial Company; and. Any major financial decisions that deviate from the financial company's strategies or policies. The financial company must submit the report referred to in Article (thirty-nine) of this decision to SAMA after it has been considered and approved by the credit and risk management committee and the board of directors, together with the decisions taken in this regard.
Part Nine Compliance
The audit committee must ensure the implementation of the compliance policy, evaluate its effectiveness, update it and propose the necessary changes to it on an annual basis; and 3. The compliance report must identify the main compliance-related risks facing the financial company, analyze existing processes and procedures and assess their viability and suggest any changes or modifications. The compliance department must have staff and resources commensurate with the financial company's business model and size.
The compliance department must ensure the Financial Company's compliance with applicable laws, regulations and circulars. The financing company must develop internal policies and procedures for anti-financial crime, specifically money laundering and terrorist financing. The financing company must prepare appropriate written organizational policies that include work manuals and procedures.
Part Ten Internal Audit
Therefore, the standards of (Know Your Customer) must be applied and the necessary actions taken to report to the financial investigation unit for any suspicious activity or process. These policies should be kept up to date regularly and they should be communicated to relevant staff in a timely and appropriate manner.
Part Eleven
Finance Policies and Procedures
Chapter One Finance Policies
Chapter Two Exposure Limits
The sum of Large Commitments may not exceed the Finance Company's paid-up capital and reserves, unless the Finance Company has received a no-objection letter from SAMA. Any person who directly or indirectly owns or controls (5%) or more of the capital or voting rights of the financing company and any entity in which such person directly or indirectly owns or controls (5%) or more of the capital or voting rights of the entity; . Any person directly or indirectly owns or controls (5%) or more of any class of securities entitling their holders to a share of the profits or income of the Financing Company.
Any entity in which the Financial Company directly or indirectly owns or controls (5%) or more shares or interests or voting rights; and. In all cases, the sum of all exposures to related parties must not exceed (50%) of the paid-up capital and reserves of the Financial Company. The Financial Company must not have any exposure to a related party that directly or indirectly owns or controls (25%) or more of the shares, interests or voting rights in the Financial Company or in which the Financial Company directly holds or controls or indirectly (25%) or more of the shares, interests or voting rights.
Chapter Three Finance Procedures
The risks associated with the exposure must be evaluated and ranked before a financial decision is made. In accordance with the risk management policy and procedures approved by Finance's board of directors, finances must be secured by assets. Personal guarantees must be valued based on the guarantor's net assets and/or net earnings.
The value and validity of collateral must be assessed before financing is provided. The Finance Company must make provisions for contingent losses and risks in accordance with International Financial Reporting Standards. SAMA may require the Finance Company to make additional or additional provision for contingent losses and risks.
Part Twelve Account and Deposits
There should be clear rules defining when finances should be transferred to personnel specialized in restructuring, planning or liquidation. Insurance of financial risks must be in accordance with the Act on the Supervision of Insurance Companies and its implementing regulations and SAMA instructions.
Part Thirteen Trading Securities
Part Fourteen Refinancing
The financing company must define criteria for reducing the value of assets, provisions standards, including the provision of country risks, taking into account International Financial Reporting Standards, and ensure that these are applied consistently. The financing company may not be financed by a foreign lender or in a currency other than Saudi Riyal unless a no-objection letter is obtained from SAMA.
Part Fifteen Structural Changes
Part Sixteen Accounts
Part Seventeen Audit and Inspection
SAMA has the right to inspect the records and accounts of the Finance Company, by SAMA's staff or by auditors appointed by SAMA, provided that the inspection will be at the Finance Company's premises. Provide the inspector with the Finance Company's records, accounts and documents that he deems necessary to carry out his task;. Disclose any violations or irregularities in the Finance Company's operations to the inspector at the beginning of his mission.
Follow the recommendations and instructions given by SAMA to the financing company to address the uncovered observations throughout the rounds of inspection. The financing company and any of its employees must not conceal or attempt to conceal any information or irregularities or fail to provide any clarifications requested by the designated inspector or fail to provide him with the requested information and documents on time. The Finance Company shall reimburse any costs to a third party appointed by SAMA as a result of procedures taken under this Part.
Part Eighteen
The Company must also inform the Borrower, through the official addresses agreed in the Financial Agreement, of the amount of installments to be paid according to the new term cost and the details regarding the number of installments or their duration if changed. It is necessary to calculate the Annual Percentage Rate, assuming the validity of the Financial Agreement for the agreed period of time and both parties commit to their obligations according to the terms contained in the Financial Agreement. All fees, commissions and administrative service charges to be recovered from the Borrower by the Finance Company shall not exceed the equivalent of (1%) of the Financing Amount or (5,000) five thousand Saudi Riyals, whichever is less.
Payments from the Financing Company to a third party as a result of the Financing Agreement of expenses stipulated therein, if they are unrecoverable expenses, for the remaining term of the Financing Agreement. The Finance Company will receive a non-objection letter from SAMA before assigning the services related to the Finance to another party. The Financing Company will take all necessary measures to ensure confidentiality of the customers' information and transactions.
Part Nineteen Finance Support Activities
The financial company and its employees maintain the confidentiality of customer data and transactions and may not disclose or expose them to other persons, except in accordance with relevant laws and instructions. Employees of the Financial Company are prohibited from disclosing any information about the company's customers and business acquired through their work, even after leaving the Financial Company.
Part Twenty
Control, investigation and prosecution staff will receive notifications, gather information and control the necessary evidence for investigation and prosecution. The Governor will issue the rules, procedures and permissions for the work of the staff of control, investigation and prosecution. SAMA will refer crimes and offenses that do not fall within its jurisdiction to the body involved in investigation and prosecution.
SAMA may exempt financing companies from some of the provisions of this regulation, without prejudice to the provisions of the Act and as required by the conditions of the sector. Compliance with the articles and 84) of the implementing regulation for the law on control of financing companies is optional when it comes to small, medium and large companies. Companies and companies engaged in financing activities in the Kingdom of Saudi Arabia before the entry into force of the law must, within the first nine months of the period prescribed in Article (36) of the law, provide SAMA with their plan to rectify their situation according to the law or a plan to leave the market.
