Regulatory Alerts2017-02-22
Cancellation of the Requirement for Official Seals on Documents and Papers Submitted for Financing Transactions
The Saudi Central Bank (SAMA) directs licensed financing companies to cease requiring official institutional or company seals on documents submitted for financing transactions. This mandate implements recent Ministry of Commerce and Investment resolutions and Royal Orders designed to streamline commercial activities and strengthen the Kingdom's investment competitiveness. The prohibition applies regardless of internal company policies, provided that all standard regulatory obligations, including Know Your Customer (KYC) requirements, are fully met.
In the Name of Allah, the Most Gracious, the Most Merciful
Saudi Central Bank Headquarters
General Directorate for Supervision of Financing Companies
Ref. No.: 381000056756 Date: 1438/05/25 Attachments:
Circular
To: ........................................................................................
Greetings,
Subject: Cancellation of the Requirement for Official Seals of Institutions and Companies on Documents and Papers Submitted for Financing Transactions.
With reference to the Ministry of Commerce and Investment letter No. (23475) dated 1438/05/05, which refers to Ministerial Resolution No. (22895) dated 1438/05/03 amending Ministerial Resolution No. (817) dated 1417/07/19 regarding the determination of certificates, instruments, and documents issued and authenticated by the Chambers of Commerce and Industry in the Kingdom, which stipulates that official seals for authenticating certificates and instruments issued by private sector establishments are not mandatory. And with reference to the Ministry of Commerce and Investment letter No. (16266) dated 1438/03/28, which refers to the Honorable Royal Order No. (11154) dated 1427/02/29 approving the recommendations of the Council of Economic and Development Affairs regarding the competitiveness of the Kingdom's investment environment, and to the proposed recommendations to enhance competitiveness and facilitate the commencement of commercial activities, including the cancellation of the requirement for official seals of institutions and companies.
Whereas it has been observed that some financing companies request official seals of institutions and companies on documents and papers submitted for financing transactions without a regulatory requirement to do so, which negatively affects the competitiveness of the investment environment in the Kingdom.
Therefore, the Bank emphasizes to licensed financing companies that they must not request official seals of institutions and companies on documents and papers submitted for financing transactions, without prejudice to the requirements of the Know Your Customer (KYC) principle.
For your information and action effective from the date hereof.
Yours sincerely,
Ahmed bin Abdullah Al Sheikh Deputy Governor for Supervision
Distribution Scope:
- Licensed financing companies.
P.O. Box: 2992, Riyadh: 11169, Phone: +966 11 4662020, Fax: +966 11 4662488