Amendment of Certain Requirements of the Account Opening Rules to Align with the New Commercial Register Law

Saudi Central Bank (SAMA)

No.: 472010505
Date: 16/02/1447
Attachments: None

Circular

To: Respected Banks,
Peace be upon you,

Subject: Amendment of Certain Requirements of the Account Opening Rules to Align with the New Commercial Register Law.

Reference is made to the new Commercial Register Law issued under Royal Decree No. (M/83) dated 19/03/1447H, and to Rule No. (1-6) regarding the Electronic Register for Legal Entities, Rule No. (3-1-2) regarding freezing bank accounts upon expiration of document validity for legal entities, Rule No. (1-4) regarding customer identity update, and Rule No. (1-2-10) regarding official notification of freezing due to death, loss of legal capacity, or commencement of liquidation or administrative liquidation procedures under the Bankruptcy Law or Companies Law; all included within the Account Opening Rules, communicated via Circular No. (76/10581) dated 01/11/1446H.

You are informed that certain requirements within the aforementioned rules have been amended to align with the new Commercial Register Law, as follows:

1. Amendment of Paragraph (b) of Rule No. (1-6) regarding the Electronic Register for Legal Entities, to read:
   "b. The Unified Number for Non-Governmental Entities starting with (7) included in the document required to maintain business activity (e.g., Commercial Register, License), along with the document number - if available - (in case the account is for the main Commercial Register, the main Commercial Register shall be recorded. If it is for a branch of the Commercial Register, the branch Commercial Register number shall be recorded)."

2. Amendment of Paragraph (First) of Rule No. (3-1-2) regarding freezing bank accounts upon expiration of document validity for legal entities, to read:
   "Freezing of all accounts and transactions for legal entities upon the expiration of (90) days from the end of the validity period of the document required to maintain business activity, unless the customer submits an official document - valid for (90) days - from the authority responsible for issuing the document, confirming that the document is under renewal. In case the document is a commercial register: the bank shall freeze the account immediately upon suspension of the registry entry."

3. Amendment of Paragraph (a) of Rule No. (1-4) regarding customer identity update, to read:
   "a. Update of identities and official documents according to type/duration:

   • Identities and documents with validity periods of less than five years: updated upon the expiration of their specified duration.
   • Identities and documents with validity periods of more than five years: updated every five years or upon expiration of the identity or official documents (whichever is earlier).
   • Accounts opened under official approvals or letters, such as government agency accounts, embassies or equivalents, international organizations or equivalents, or under licenses and registers opened for a fixed period such as companies, sole establishments, associations, non-profit institutions, or private schools; their update duration must not exceed five years as a maximum."

4. Amendment of Paragraph (a) of Item (First) of Rule No. (1-2-10) regarding official notification of freezing due to death, loss of legal capacity, or commencement of liquidation or administrative liquidation procedures under the Bankruptcy Law or Companies Law, to read:
   "First: The bank shall, based on applicable regulations, suspend account transactions and freeze the balance upon becoming aware of or receiving an official notification from the competent authority regarding any of the following:
   . Death of the account holder(s), or cancellation of the commercial register for a sole establishment..."

For information and action as of its date.
Signature,
Yours sincerely,
Zayed bin Ahmed Al-Sheikh
Deputy Governor for Supervision

Distribution Scope:

• Banks and financial institutions operating in the Kingdom

P.O. Box 2992, Riyadh 11169, Kingdom of Saudi Arabia | Tel: +966 11 463 3000 / +971 11 413 3000 | Saudi Arabia, Riyadh, P.O. Box 2992