Regulatory Alerts2019-09-08
Circular Re. Large Exposure (LEX) Rules for Banks
The Saudi Arabian Monetary Authority (SAMA) issued updated Large Exposure (LEX) Rules effective October 1, 2019, to align with international best practices and enhance financial system stability. The regulations establish strict exposure limits, including a 15% cap for single counterparties and groups of connected counterparties, a 5% cap for individuals, and a 25% cap for banks and government-majority commercial undertakings. Banks are required to implement robust governance frameworks, conduct regular stress testing, and adhere to precise measurement principles for on- and off-balance sheet exposures while reporting breaches immediately to the regulator.
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