Providing Annual and Quarterly Financial Statements and Internal Control System Reports to SAMA

In the Name of Allah, the Most Gracious, the Most Merciful Saudi Arabian Monetary Authority Headquarters

Exchange Offices Supervision Department Ref: 35217/41 Date: 06/06/1440 AH Attachments: None

Circular

To: Institution / Company Peace, mercy, and blessings of Allah be upon you,

Subject: Providing the Authority with Annual and Quarterly Financial Statements and Annual Internal Control System Reports.

Pursuant to the provision of paragraph (c) of Article (Fifteen) of the Rules Governing the Practice of Exchange Business issued by Minister of Finance Decision No. (1357) dated 1/5/1432 AH, which stipulates: "The Authority may issue any instructions it deems necessary to apply supervisory and regulatory requirements on exchange business," and pursuant to Article (Seventeen) of the Rules which stipulates: "Every exchange dealer must maintain regular accounting records in which he records his transactions chronologically as determined by the Authority, and must follow the accounting standards determined by it when preparing his financial statements, and must provide the Authority with the following data: a) A copy of the audited annual balance sheet by an authorized external auditor within a maximum period of one month from the end of the financial year. b) A financial position statement every three months starting from the beginning of the financial year, submitted within fifteen days from the following quarter...", and what Article (Nineteen) of the Rules stipulates: "The exchange dealer must submit a copy of the audit report on his annual financial statements to the Authority, and the report must include any comments regarding these statements and their compliance with applicable systems and standards."

Accordingly, exchange offices must comply with the following:

First: Quarterly Financial Data: a- The Authority emphasizes the importance of providing it with the financial position statement every three months, starting from the beginning of the financial year, within fifteen days from the following quarter, in accordance with the provision of paragraph (b) of Article (Seventeen) of the Rules Governing the Practice of Exchange Business. b- Providing the Authority with the quarterly financial statements reviewed by an authorized external auditor in accordance with the accounting standards applicable in the Kingdom within 30 days from the following quarter.

1 P.O. Box 2992 Riyadh 11169 Phone: 011 4633000

In the Name of Allah, the Most Gracious, the Most Merciful Saudi Arabian Monetary Authority Headquarters

Exchange Offices Supervision Department Attachments:

Second: Annual Financial Data: a- The Authority emphasizes the importance of providing it with the audited annual balance sheet by an authorized external auditor in accordance with the accounting standards applicable in the Kingdom within a maximum period of one month from the end of the financial year, in accordance with the provision of paragraph (a) of Article (Seventeen) of the Rules Governing the Practice of Exchange Business. b- Providing the Authority with the audited annual financial statements by an authorized external auditor in accordance with the accounting standards applicable in the Kingdom pursuant to Article (Nineteen) of the Rules Governing the Practice of Exchange Business, within a maximum period of two months from the end of the financial year.

Third: The total duration of appointment of the external auditor for an exchange office must not exceed five consecutive years.

Fourth: Annually instructing the external auditor to evaluate the internal control systems implemented at the exchange office, and providing the Authority with a copy of the report within a maximum period of two months from the end of the financial year, such that the report is separate from the annual financial statements.

Fifth: Sending the annual and quarterly financial data and the internal control system report, along with a scanned electronic copy of the exchange office's cover letter to the email address (MEXCH@SAMA.GOV.SA), and a hard copy addressed to the Exchange Offices Supervision Department.

For information and implementation effective from the financial year 2019, with acknowledgment of receipt within one week of its date, noting that the Authority will take all regulatory measures against exchange offices violating the provisions of this circular.

Yours sincerely,

[Signature] Fahd bin Ibrahim Al-Shatri Deputy Governor for Supervision

Al-Khobar Distribution Scope:

• Exchange Offices (A, B)

2 P.O. Box 2992 Riyadh 11169 Phone: 011 4633000