Regulatory Alerts2017-12-27
Rules for Special Purpose Entities
The Capital Market Authority of Saudi Arabia has issued comprehensive Rules governing the establishment, licensing, and operational framework for Special Purpose Entities (SPEs) issuing or intending to issue debt instruments. The Rules mandate strict licensing conditions, independent board composition, and clearly defined roles for sponsors, trustees, and originators while enforcing true sale standards and asset segregation for securitization transactions. Furthermore, the framework establishes robust record-keeping, audit, and custody requirements alongside explicit Authority powers to approve by-laws, waive provisions, and enforce compliance or termination of SPEs.
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