Revision to Basel II Market Risk Framework Updated as of 31 December 2010

�aubi �rabian ;fNonetarp �gencp Banking Supervision Dept. From To Attention Subject 20 November 2011 5�121/JJcS. Ut H Saudi Arabian Monetary Agency All Banks Managing Directors, Chief Executive Officers and General Managers Revision to Basel II Market Risk Framework - updated as of 31 December 2010 The Agency refers to its circular number BCS 559 of 26 December 2009 covering a Basel Committee on Banking Supervision (BCBS) paper entitled "July 2009 - Basel II Market Risk Framework". In February 2011, the BCBS has issued an updated document relating to this subject. The Agency recommends that all Banks currently engaged in implementing Basel II in Saudi Arabia should ensure that their relevant staff involved in the implementation of the Basel framework are fully aware of this paper and are taking appropriate actions to benefit from these standards. Bank staff in other areas such as Risk Management, Financial Controls, and Internal Audits should also be familiar with this paper. Over the next few month, the Agency will, where appropriate, update its guidance documents following which banks will be expected to implement the changes. These documents should be accessed from the Bank for International Settlement website address: (http://www.bis.org). Dr. Abdulrahman AI-Hamidy Vice Governor P. 0. Box 2992 - Riyadh 11169, Saudi Arabia - Tel.: 01-463 3000 - Telex 404390 SJ - Fax 01-466 2119