Allowing the Saudi Real Estate Refinance Company to Purchase Residential Mortgage Portfolios from Real Estate Financiers after a Minimum of Three Months from the Date of Granting the Financing Related to those Assets

In the Name of Allah, the Most Gracious, the Most Merciful

Saudi Central Bank (SAMA)
Head Office
Office of the Deputy Governor for Supervision

Ref. No.: 61108/99
Date: 13/10/1440 AH
Attachments: None

Circular

To: Respected Parties,
Peace, mercy, and blessings of Allah be upon you.

Subject: Allowing the Saudi Real Estate Refinance Company to Purchase Residential Mortgage Portfolios from Real Estate Financiers After a Minimum of Three Months from the Date of Granting Financing Related to Those Assets.

Based on the powers granted to the Saudi Central Bank under the Mortgage Financing System issued by Royal Decree No. (M/50) dated 13/8/1433 AH, and its Executive Regulations issued by the decision of His Excellency the Minister of Finance No. (1229) dated 10/4/1434 AH, and the Supervision of Financing Companies System issued by Royal Decree No. (M/51) dated 13/8/1433 AH and its Executive Regulations issued by the decision of His Excellency the Governor of the Saudi Central Bank No. (1/M.Sh.T) dated 10/4/1434 AH.

And based on Article 76 of the Executive Regulations of the Supervision of Financing Companies System, which stipulates that "2. A financing company shall not dispose of financing assets or the rights arising therefrom in any manner except in accordance with the rules issued by the Bank on this matter", and Paragraph 5 of the updated Rules for Disposing of Financing Assets or Rights Arising Therefrom issued via Circular No. (99/60558) dated 09/10/1440 AH, which stipulates that "the Bank may exempt certain transactions involving the disposal of financing assets or rights arising therefrom from some provisions of these rules if it deems that their nature or volume warrants such exemption."

I wish to inform you that the Bank has decided to allow the Saudi Real Estate Refinance Company to purchase residential mortgage portfolios from real estate financiers after a minimum of three months from the date of granting financing related to those assets, or three months from the date of receiving the first installment from the beneficiary, whichever is later, with a recourse right against the financier for six months from the date of granting financing.

For your information and compliance effective from its date.

Yours sincerely,

Fahd bin Ibrahim Al-Shathri
Deputy Governor for Supervision

Distribution Scope:

• Banks operating in the Kingdom.
• Financing companies operating in the Kingdom.

P.O. Box 2992, Riyadh 11169, Tel: 4662300 - Fax: 4662543