Regulatory Alerts2020-06-20
Circular Re. Issuance of Controls for Registration Procedures in the Contract Registry and Data Requirements for Registration; Provisions and Procedures for Third-Party Access to the Registry
The Saudi Central Bank (SAMA) issued Decision No. 94/MT to establish binding controls for the registration of finance lease contracts, including mandatory data requirements and third-party access protocols. The regulations mandate that lessors register contracts and modifications within ten working days and require registered lease companies to maintain secure, unified records under SAMA's supervision. Furthermore, the document defines strict confidentiality exceptions, allowing specific entities such as courts, SAMA, and licensed financial institutions to access registry data upon proper authorization.
Circular Re. Issuance of Controls for Registration Procedures in the Contract Registry and Data Requirements for Registration; Provisions and Procedures for Third-Party Access to the Registry
In the Name of Allah, the Most Gracious, the Most Merciful
Saudi Central Bank Headquarters
Office of the Governor's Deputy for Supervision
Number: ............................................................ Date: 29/10/1441 AH ........................................ Attachments: ........................................................
Circular
Dear Sirs,
Peace, mercy, and blessings of Allah be upon you,
Subject: Issuance of Controls for Registration Procedures in the Contract Registry, Data Requirements for Registration, and Provisions and Procedures for Third-Party Access to the Contract Registry.
Referring to the powers granted to the Saudi Central Bank (SAMA) under the Financial Leasing System issued by Royal Decree No. (M/48) dated 13/8/1433 AH, and based on Article 30 of the Executive Regulations of the Financial Leasing System issued by Decision No. 1/MT dated 14/4/1434 AH, which stipulates that "Subject to what is stated in the System and these Regulations, a decision by the Governor, in agreement with the Minister of Justice, shall include the procedures for registration in the Contract Registry, the data required for registration, and the provisions and procedures for third-party access to the Contract Registry." And based on the minutes of agreement with His Excellency the Minister of Justice.
We inform you of the issuance of His Excellency the Governor's Decision No. 94/MT dated 18/10/1441 AH, which includes the approval of the controls for registration procedures in the Contract Registry, the data required for registration, and the provisions and procedures for third-party access to the Contract Registry, according to the attached format.
Accept our regards,
Fahd bin Ibrahim Al-Shathri Governor's Deputy for Supervision
Distribution Scope
- Banks and commercial banks operating in the Kingdom.
- Financing companies operating in the Kingdom.
- Finance lease contract registration companies operating in the Kingdom.
P.O. Box 2992, Riyadh 11169, Tel: 4662200, Fax: 4662543
Controls for Registration Procedures in the Contract Registry, Data Requirements for Registration, and Provisions and Procedures for Third-Party Access to the Contract Registry
Shawwal 1441 AH / June 2020 CE
These controls were issued based on the Financial Leasing System issued by Royal Decree No. (M/48) dated 13/8/1433 AH, and its Executive Regulations issued by the Governor's Decision No. (1/MT) dated 14/4/1434 AH. In implementation of Article 30 of the Executive Regulations of the Financial Leasing System, which states: "Subject to what is stated in the System and these Regulations, a decision by the Governor, in agreement with the Minister of Justice, shall include the procedures for registration in the Contract Registry, the data required for registration, and the provisions and procedures for third-party access to the Contract Registry."
These controls apply to finance lease contract registration companies licensed by the Saudi Central Bank (SAMA).
Table of Contents
| Part | Page Number |
|---|---|
| Chapter One: Definitions and General Provisions | 3 |
| Chapter Two: Registration | 4 |
| Chapter Three: Registration Documents | 5 |
| Chapter Four: Access to Registry Data | 6 |
| Chapter Five: Enforcement | 6 |
Chapter One: Definitions and General Provisions
Article One: Definitions
1- The meanings of the words and phrases used in these controls are those specified in the Financial Leasing System and its Executive Regulations.
2- For the purpose of applying the provisions of these controls, the following words and phrases - wherever they appear in these controls - have the meanings indicated opposite each of them, unless the context dictates otherwise:
Controls: Controls for registration procedures in the Contract Registry, data required for registration, and provisions and procedures for third-party access to the Contract Registry.
Interested Parties: The contracting parties or persons authorized by the contracting parties.
Registration: The recording and official documentation of finance lease contracts in accordance with the provisions of the System, Regulations, and Controls.
Company: The specialized joint-stock company licensed to register finance lease contracts in accordance with the System.
Registered Right: The subject matter of the finance lease contract concluded between the two parties and recorded in the Contract Registry or intended to be recorded.
Registrar: The Head and Clerks of the Finance Lease Contract Registry.
Head of the Contract Registry: The registration head appointed by the Company, responsible for registration activities and issuing certified certificates.
Clerk of the Contract Registry: The registry clerk appointed by the Company, entrusted with registering the contract and its amendments in the registry.
Extract of the Executive Instrument: A document issued by the Company for execution against the leased asset in accordance with the Execution System and its Executive Regulations.
Article Two: General Provisions
1- In the event that the Saudi Central Bank (SAMA) licenses more than one registration company, the Saudi Central Bank (SAMA) shall issue rules for unifying the registry, provisions for the enforcement of registration companies' access to it, and their conduct of registration activities.
2- In the event that the Saudi Central Bank (SAMA) licenses more than one registration company, these licensed companies shall take the necessary measures to ensure the unity of the Contract Registry data, exchange of data among them, protection of Contract Registry data, and its preservation.
3- The Company shall establish a registry for finance lease contracts and manage its records in accordance with what is stated in the System, Regulations, and Controls.
4- The Registry shall be owned by the Saudi Central Bank (SAMA) and subject to its supervision and oversight. The Company shall not dispose of it except after obtaining written non-objection from the Saudi Central Bank (SAMA).
5- The Company shall follow the latest means and best practices, with organized secure access to Contract Registry data.
6- The Company shall exercise due care to preserve the data and integrity of the information contained in the Contract Registry.
Chapter Two: Registration
Article Three:
1- The lessor shall register the contract and any amendments thereto within 10 working days from the date of the contract's conclusion or amendment, through the Registry's electronic portal or its replacement.
2- All transactions affecting the rights and legal positions of the parties, submitted by the contracting parties or competent authorities, shall be recorded in the Registry.
3- The Company shall be committed to maintaining all necessary contract registries to register transactions and classify them according to the latest means and best practices in this regard, and the Saudi Central Bank (SAMA) shall set the controls and instructions related to them.
Article Four:
1- The contents of the Registry shall consist of the data contained in the registered contracts and their contents. In case the Registry's content contradicts any other documents between the contracting parties, the Registry's content shall prevail. Any amendment to the contract must be attached to its registry; otherwise, it cannot be invoked.
2- Exception to the provisions of paragraph (1) of this Article: The provisions of the previous paragraph shall not apply to contracts prior to the establishment of the Registry, except after their registration in the Registry and the parties' approval of their content.
3- The Registrar shall verify the data of the contract's subject matter, which shall include at a minimum the following: (a) Description of the Registered Right, including the name, type, serial number (if any), production date, country of origin, and asset ownership document data. (b) Insurance data (if any). (c) Contract duration. (d) Total financing amount subject to the contract, its duration, method of rent calculation, and payment mechanism. (e) Bank account number for rent deposit, and bank name (if any). (f) Statement of consequences resulting from delay in payment subject to the contract. (g) Statement of cases in which the beneficiary may reclaim the Registered Right from the third party. (h) Agreement of the contracting parties to disclose Contract Registry information. (i) Data on ownership and possession of the leased asset. (j) Any other data or information determined by the Saudi Central Bank (SAMA) later or required by execution authorities.
Article Five:
Finance lease contracts shall be registered according to the model approved by the Company and agreed upon by the Saudi Central Bank (SAMA).
Article Six:
1- Documents and declarations issued by the Clerk of the Contract Registry shall be written in Arabic.
2- Certification of a document in a language other than Arabic is permitted after its translation into Arabic by a certified translator. In this case, certification shall be applied to both the original document and its translation.
Article Seven:
1- The Head of the Contract Registry shall issue an official document called the "Registered Finance Lease Contract," containing the data included in the Contract Registry.
2- The Head of the Contract Registry shall issue a document titled "Extract of the Executive Instrument for the Registered Finance Lease Contract" according to the model approved by the Company and agreed upon by the Saudi Central Bank (SAMA).
3- The Company may issue other documents according to models approved and agreed upon by the Saudi Central Bank (SAMA).
Article Eight:
Entries in the Contract Registry shall be preserved for at least ten years from the date of expiration of the obligations arising from the contract.
Article Nine:
Interested Parties shall be entitled to obtain a paper or electronic copy of the Registry signed and certified by the Company.
Chapter Three: Registration Documents
Article Ten:
1- Based on the provisions of Article (22) of the Regulations, any of the following documents shall be considered proof of ownership of the leased asset: (a) Real estate ownership deed. (b) Asset ownership document. (c) Customs card. (d) Intellectual property registration certificate. (e) Purchase deed.
2- The Saudi Central Bank (SAMA) may approve any other official documents as proof of ownership, or require additional reports to prove it, provided that the Company announces the Saudi Central Bank (SAMA)'s decision regarding this.
Article Eleven:
1- Registration based on identity verification shall rely on National ID card data, Resident ID card data, and Commercial Registry data or its equivalent for legal entities.
2- Registration of the Registered Right and assets equivalent to it shall rely on the asset ownership proof document in accordance with Article (Ten) of these Controls. The ownership document must be stamped to indicate rights arising from the registered contract, restricting the ownership of the asset by registered rights, and taking necessary measures regarding documents that do not accept stamping, such as real estate ownership deeds. The Company may use electronic means for this purpose.
3- The Company may use electronic means for registering contracts and other services, after obtaining non-objection from the Saudi Central Bank (SAMA).
Article Twelve:
The holder of the ownership document is prohibited from disposing of the Registered Right in a manner contrary to the provisions of the registered contract according to these Controls. Interested parties may file a criminal or civil lawsuit, as appropriate, and must notify the relevant Registrar of this. In this case, the Registrar must notify one or more licensed credit data service providers in accordance with the Credit Data System; to include the holder of the ownership document in the credit registry.
Chapter Four: Access to Registry Data
Article Thirteen:
1- The Company shall protect the commercial confidentiality of Interested Parties. Exception to this, the Company shall provide the Registry data to the following entities: (a) Parties to the registered contract. (b) Entities licensed to conduct financing activities, after obtaining written consent from the lessor. (c) The Judiciary. (d) The Saudi Central Bank (SAMA). (e) Interested parties in the secondary market; the beneficiary may, in the case of securitization, request access for interested parties to the Registry, including advisors, appraisers, and others. (f) The Capital Market Authority, after obtaining non-objection from the Saudi Central Bank (SAMA). (g) Any government entity, after obtaining non-objection from the Saudi Central Bank (SAMA).
2- The request shall be submitted electronically or in paper to the Company. The Company shall issue a copy of the registration data signed and certified by the Company within (5) five working days from the date of the request submission.
Chapter Five: Enforcement
Article Fourteen: