Regulatory Alerts2014-07-21
Enhancement of SAMA Circulars Concerning Basel II, II.5 and III Capital Adequacy Framework
The Saudi Arabian Monetary Agency (SAMA) has issued a comprehensive revision of its Basel II, II.5, and III capital adequacy circulars to align domestic regulations with Basel Committee on Banking Supervision standards. The updated framework clarifies capital consolidation rules, adjusts deduction thresholds for commercial and insurance subsidiaries, and mandates stricter legal certainty and collateral management procedures for advanced IRB and market risk approaches. Banks must implement these aligned requirements by October 1, 2014, with SAMA bypassing a formal consultation period in favor of targeted FAQs and revised documentation to be released shortly.
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