Circular Re. Trade Repository Reporting and Risk Mitigation Requirements for Over-the-Counter (OTC) Derivatives Contracts

P.O Box 2992, Riyadh 11169, Kingdom of Saudi Arabia. Tel: +966 11 463 3000 Circular To: The Managers Peace, mercy and blessings of God be upon you, Subject: Update to Trade Repository Reporting and Disclosure and Risk Mitigation Requirements for Non-Centrally Cleared OTC Derivatives Contracts. Reference is made to the Trade Repository Reporting and Disclosure and Risk Mitigation Requirements for Non-Centrally Cleared OTC Derivatives Contracts issued by the Saudi Central Bank pursuant to Circular No. 42056371 dated 08/10/1442 AH. In light of the importance of enhancing data quality and achieving accurate reporting and supervision, the adoption of the Unique Product Identifier (UPI) has been approved as a mandatory element within the data reported by counterparties. The updated requirements are attached. The updated Trade Repository Reporting and Disclosure and Risk Mitigation Requirements for Non-Centrally Cleared OTC Derivatives Contracts replace the aforementioned Circular, and the Saudi Central Bank confirms that all banks and financial institutions that have implemented them are subject to these requirements effective from 1 February 2026. Yours faithfully, Yazid bin Ahmed Al Sheikh Deputy Governor for Supervision Distribution Scope:

• Banks and financial institutions operating in the Kingdom.
• Saudi Credit Information Company (SIMAH).

Page Number 1 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 Saudi Central Bank (SAMA)

Table of Content

1. Introduction .................................................................................................................................. 3
2. Effective Data…………………………………………………………………………………….3
3. Section A: ...................................................................................................................................... 4 3.1 Trade Reporting Requirements for Over-The-Counter (OTC) Derivatives Contracts ...... 4 3.1.1 Application ......................................................................................................................... 4 3.1.2 Scope of Reporting ............................................................................................................ 4 3.1.3 Manner of Reporting .......................................................................................................... 6 3.1.4 Timing of Reporting .......................................................................................................... 7 3.1.5 Reporting error amendments .............................................................................................. 7 3.1.6 Keeping of records ............................................................................................................. 7 3.1.7 Technical Support .............................................................................................................. 7
4. Section B: ....................................................................................................................................... 8 4.1 Risk Mitigation Requirements for Non-Centrally Cleared Over-The-Counter (OTC) Derivative Contracts. ....................................................................................................................... 8 4.1.1 Trading Relationship Documentation ................................................................................ 8 4.1.2 Trade Confirmation ............................................................................................................ 9 4.1.3 Valuation ............................................................................................................................ 9 4.1.4 Portfolio Reconciliation ................................................................................................... 10 4.1.5 Portfolio Compression ..................................................................................................... 11 4.1.6 Dispute Resolution ........................................................................................................... 11 4.1.7 Governance ...................................................................................................................... 11 Appendix A ...................................................................................................................................... 13 Appendix B ...................................................................................................................................... 52 Appendix C ...................................................................................................................................... 56

Page Number 3 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 Trade Repository Reporting and Risk Mitigation Requirements for Over-the-Counter (OTC) Derivatives Contracts

1. Introduction
2. These Requirements are issued by Saudi Central Bank (SAMA) in exercise of the powers vested upon it under its Law issued by the Royal Decree No. (M/36) on 11-04-1442H, and the Banking Control Law issued by the Royal Decree No. (M/5) on 22-02-1386H, and the rules for Enforcing its Provisions issued by Ministerial Decision No. 3/2149 on 14-10-1406AH.
3. These requirements are divided into two Sections;  Section A sets out the requirements for the reporting of over-the-counter (OTC) derivative transactions to the SAMA authorized Trade Repository (TR) Operator.  Section B requires banks, which enter into non-centrally cleared OTC derivative transactions to implement specified risk mitigation requirements. These risk mitigation requirements will apply to a bank, which is a contracting party to OTC derivative transactions that are not centrally cleared, irrespective of the bank’s outstanding notional amount of non-centrally cleared OTC derivatives or whether or not the transaction is executed for hedging purposes. OTC derivatives, which are centrally cleared, either directly or indirectly, are not subject to the risk mitigation requirements. Indirect clearing is an arrangement whereby a bank provides client-clearing services by clearing a client’s OTC derivative transactions through another clearing intermediary.
4. Effective Date These updated requirements shall supersede SAMA circular No. 42056371 dated 10-08-1442 AH. The updated requirements will take effect by 1 February 2026.

Page Number 4 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 3. Section A: 3.1 Trade Reporting Requirements for Over-The-Counter (OTC) Derivatives Contracts. 3.1.1 Application

1. The reporting requirements are applicable to all banks in the Kingdom of Saudi Arabia (KSA) with OTC derivative transactions. 3.1.2 Scope of Reporting
2. OTC derivative transactions that fall within the scope of “reportable transactions” described in paragraphs 3 to 7 below are required to be reported to the SAMA authorised Trade Repository Operator.
3. Reportable transactions are derivative transactions that meet the following criteria: a. The transaction is traded over-the-counter either non-cleared or cleared and novated to a central counterparty (CCP), excluding exchange-traded transactions; b. Reportable transactions include interest rate derivatives, a foreign exchange (FX) derivatives, equity derivatives, credit derivatives and commodity derivatives supported by the SAMA authorised Trade Repository; c. The transaction is conducted by a counterparty which is a licensed bank in Kingdom of Saudi Arabia (KSA) (in the case of a locally incorporated bank) or by its financial subsidiaries (including SPVs) or branches or a foreign bank branch licensed by SAMA in KSA . d. The other counterparty to the transaction is: i. A licensed bank in KSA (in the case of a locally incorporated bank) or a KSA branch (in the case of a foreign bank); ii. A KSA or a foreign financial and non-financial counterparty; or iii. A CCP, if the OTC transaction is cleared though a CCP.
4. If a reportable transaction is, for example, entered into between a KSA branch of Bank X and the USA Head Office of Bank Y, Bank X falls within paragraph 3(c) while Bank Y falls within paragraph 3(d). The transaction is reportable by Bank X but not by Bank Y. If, however, the transaction is booked in KSA branch of Bank Y, reporting obligation rules must be applied to determine the reporting counterparty as per the single sided reporting obligation approach as mentioned in Appendix C.

Page Number 5 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 5. The transactions referred to in paragraph 3(c) above include those that are booked in KSA office/branch of a licensed bank as a result of transfer of booking (i.e. through novation) of contracts entered into with external parties by the head office or overseas branches of the bank. If such novated transactions are reportable (i.e. the criteria set out in paragraph 3 above are also met after novation), the reporting bank should report the external counterparty (another licensed bank) who has originally entered into contract with the bank, instead of the office/branch from which the contract is transferred, as its counterparty to the transaction. 6. Reportable transactions do not include interbranch transactions (except those that fall within paragraph 4 above) and intrabranch transactions (e.g. transactions between different desks of the treasury function). An interbranch transaction refers to a principal-to-principal transaction (or a back-to-back transaction) conducted between different branches of the same bank, including any transaction undertaken to transfer the risk of the transaction (or portfolio transactions) from one branch to another. 7. For the avoidance of doubt, reportable transactions: A. Exclude “spot” FX transactions, which refer in this context to FX transactions that are settled via an actual delivery of the relevant currencies within two business days; B. Exclude, from the perspective of a reporting bank, those transactions booked in its local or overseas subsidiaries (unless those subsidiaries are licensed banks and reporting criteria set out in these requirements are met, where in such case, they need to report to KSA TR regardless of their location); C. Include, in the case of reportable transactions which are novated for central clearing, those new transactions entered into by reporting banks with CCPs ; and D. Exclude, transactions in which any of the following institutions participate as counterparty: i. The Government of the Kingdom of Saudi Arabia ii. SAMA iii. The Saudi Stock Exchange iv. A Supranational Authority v. Multilateral Development Banks

Page Number 6 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 3.1.3 Manner of Reporting 8. All reporting banks are required to directly report to the SAMA authorised TR Operator. Banks are not allowed to report through agents or outsource their reporting requirements to third party service providers. 9. All reporting banks are required to enter into a reporting service agreement with SAMA authorised TR Operator. 10. The reporting service agreement signed by each reporting bank with SAMA authorised TR must contain a clause providing consent for the bank for the reporting of trade data to the SAMA authorised TR by its counterparties. This consent is essential to alleviate any potential concern on data confidentiality from bank counterparties, which may need to report trade data to the SAMA authorised TR relating to other counterparties that do not themselves have any such reporting obligation under the reporting requirements. 11. Since reporting has to be made to the SAMA authorised TR by electronic means, reporting banks are required to set up systems linkages and conduct user tests with the SAMA authorised TR. Reporting banks must complete the user tests to the satisfaction of the SAMA authorised TR before they will be accepted for reporting. 12. The SAMA authorised TR has designed specific templates for reporting the details of the reportable transactions. A reporting bank is required to complete all the fields in the templates, which primarily relate to the economic terms of a transaction and information essential for administrative purposes. A list of fields on the templates for reporting of transactional data is attached as Appendix A. 13. Reporting to the SAMA authorised TR is compulsory: A. When a reportable transaction is executed by a reporting bank for the first time; and B. Whenever there are subsequent reportable business events until the transaction is fully terminated (which includes termination due to novation). A list of reportable events is set out in Appendix B for reference. 14. A reporting bank may report changes in the economic details of a reportable transaction by submitting amendments to update the transaction records of the SAMA authorised TR. Alternatively, the bank may update the records of the SAMA authorised TR by submitting specific templates designated for reporting individual business events (Appendix B).

Page Number 7 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 15. Reportable business events shall be reported by adopting a life cycle approach. Under the life cycle approach, each business event will be reported according to the T+1 reporting timeline referred to in paragraph 17 below. 16. After an original trade is novated for central clearing, the reporting bank should report the open trade as an early termination business events and open a new one with the reference to the old trade identifier in the field “Linked UTI” (table 3 item 47) as specified in the Appendix B 3.1.4 Timing of Reporting 17. The reporting bank will must ensure that it reports to the SAMA authorised TR reportable transactions (including where appropriate any subsequent business events) before 23:59:59 of the next business day (T+1). For the purpose of these reporting requirements, Fridays and Saturdays and general KSA holidays do not count as business days. 18. Reporting is not required if a reportable transaction that has yet to be reported to the SAMA authorized TR is cancelled or fully terminated within the T+1 reporting timeline. This, however, does not apply to the cancellation or full termination of a transaction for the sake of subjecting the transaction to central clearing. In such cases, the original reportable transaction pending central clearing (and the business events arising from the central clearing) should be reported according to the T+1 timeline, unless the transaction is cancelled or fully terminated before it is reported to the SAMA authorized TR with T+1 timeline. 3.1.5 Reporting error amendments 19. Guidance on reporting error amendment can be found in Appendix B. 3.1.6 Keeping of records 20. A reporting bank must keep records that enable the reporting bank to demonstrate it has complied with these requirements. 21. A reporting bank must keep the records for a period of at least ten (10) years from the date the record is made or amended. 3.1.7 Technical Support 22. The SAMA authorized TR shall provide the reporting banks with technical reporting guidelines/manual for its systems/reporting tools. All enquiries relating to technical support should be directed to the SAMA authorized TR.

Page Number 8 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 4. Section B: 4.1 Risk Mitigation Requirements for Non-Centrally Cleared Over-The-Counter (OTC) Derivative Contracts. 4.1.1 Trading Relationship Documentation

1. The trading relationship documentation should: a) Provide legal certainty for non-centrally cleared over-the-counter derivatives contracts; b) Include all material rights and obligations of counterparties concerning their trading relationship with regard to non-centrally cleared over-the-counter derivatives contracts. Such rights and obligations of the counterparties may be incorporated by reference to other documents in which they are specified; and c) Be executed in writing or through other equivalent non-rewritable, nonerasable electronic means (without prejudice to subparagraph (b) above).
2. The material rights and obligations referred to in paragraph 1(b), where relevant, may include: a) Payment obligation; b) Netting of payments; c) Events of default or other termination events (For instance, any rights to early termination) d) Calculation and any netting of obligations upon termination; e) Transfer of rights and obligations; f) Governing law; g) Processes for confirmations, valuation, portfolio reconciliation and dispute resolution; and h) Matters related to credit support arrangements (e.g. initial and variation margin requirements, types of assets that may be used for satisfying such margin requirements and any asset valuation haircuts, investment and rehypothecation terms for assets posted to satisfy such margin requirements, guarantees and custodial arrangements for margin assets such as whether margin assets are to be segregated with a third party custodian).
3. The retention period for trading relationship documentation should be a minimum of ten (10) years after the termination, maturity or assignment of any non-centrally cleared over-the-counter derivatives contracts.

Page Number 9 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 4.1.2 Trade Confirmation 4. Banks are required to confirm the material terms of a non-centrally cleared over-the-counter derivatives transaction as soon as practicable after execution of the transaction, including a new transaction resulting from novation. Banks are also required to adopt policies and procedures to confirm material changes to the legal terms of, or rights and obligations under, the non-centrally cleared over-the-counter derivatives contract, such as those relating to termination prior to scheduled maturity date, assignment, amendment or extinguishing of rights or obligations. 5. The material terms confirmed should include terms necessary to promote legal certainty to the non-centrally cleared over-the-counter derivatives transaction, including incorporating by reference, the trading relationship documentation or any other documents that govern or otherwise form part of the trading relationship documentation. 6. The confirmation should be executed in writing through: A. Non-rewritable, non-erasable automated methods where it is reasonably practicable for the bank to do so; B. Manual means; or C. Other non-rewritable, non-erasable electronic means (such as email). 7. Banks are required to implement appropriate policies and procedures to ensure a two-way confirmation is executed with a counterparty (financial and non-financial). 8. For non-centrally cleared over-the-counter derivatives transactions concluded after the bank’s dealing system cut off time, or with a counterparty located in a different time zone, banks are required to execute the confirmation as soon as practicable. 4.1.3 Valuation 9. Banks are required to agree with their counterparties the process for determining the values of the non-centrally cleared over-the-counter derivatives transactions in a predictable and objective manner. The process should cover the entire duration of the non-centrally cleared over the-counter derivatives transaction, at any time from the execution of the contract to the termination, maturity, or expiration thereof. All agreements on valuation process should be documented in the trading relationship documentation or trade confirmation and may include matters such as the approach to valuation, the key parameters and the data sources for such parameters.

Page Number 10 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 10. The valuation determinations should be based on economically similar transactions or other objective criteria. Banks should be able to compute the valuation internally and be able to corroborate any valuations done by their counterparts or third parties. Where a bank uses a proprietary valuation model, it must use a model employing valuation methodologies with mainstream acceptance. If new methodologies are used, these should have a sound theoretical basis and the bank will need to justify their use, e.g. by showing that the new methodology addresses a limitation of an existing methodology or improves the reliability of the valuation. 11. Banks are required to perform periodic review of the agreed upon valuation process to take into account any changes in market conditions. Where changes are made as a result of the review, the relevant documentation must be updated to reflect such changes. 12. Banks are required to agree on and document: A. The alternative process or approach by which the bank and its counterparty will determine the value of a non-centrally cleared over-the counter derivatives transaction in the event of the unavailability, or other failure, of any inputs required to value the transaction; B. Any changes or procedures for modifying the valuation process at any time so long as the agreements remain consistent with the applicable law; and C. How a dispute on valuation, if it arises, should be resolved. 4.1.4 Portfolio Reconciliation 13. Banks are required to include in their policies and procedures: A. The process or method for portfolio reconciliation that it has agreed with its financial counterparties; and B. The process or method that reflects its efforts to conduct portfolio reconciliation with its non-financial counterparties, e.g. by providing, on a periodic basis, a non-financial counterparty with a statement on the material terms and valuations of the non-centrally cleared over-the-counter derivatives contracts entered into with that non-financial counterparty. 14. The process or method of portfolio reconciliation should be designed to ensure an accurate record of the material terms and valuations of the non-centrally cleared over-the-counter derivatives contracts, and identify and resolve discrepancies in the material terms and valuations in a timely manner with the counterparty.

Page Number 11 of 56 Issue Date September 2025 Trade Repository Reporting and Risk Mitigation Version Requirements for Over-the-Counter (OTC) Derivative Contracts 4.0 15. Banks are required to determine the scope and frequency of portfolio reconciliation with a counterparty, taking into account the risk exposure profile, size, volatility and number of non-centrally cleared over-the-counter derivatives transactions which the bank has with that counterparty. Portfolio reconciliation should be carried out more frequently where the bank has a higher number of outstanding transactions with its counterparty. 16. Banks are required to establish and implement policies and procedures to ensure that the material terms are exchanged and valuations (including variation margin) are regularly compared between counterparties.