Regulatory Alerts2012-11-13
Guidance on Implementation of Capital Reforms Under the Basel III Framework
SAMA mandates the continuation of quarterly monitoring for Leverage and Liquidity Ratios while initiating Basel III Capital Ratio assessments effective 1 January 2013. Banks must submit their first quarterly prudential returns for data as of 31 March 2013 by 30 April 2013, undergoing parallel runs for Capital Adequacy Ratios from January through June 2013. Following this transitional period, the existing Basel II and II.5 regulatory capital frameworks will be fully discontinued to establish Basel III as the sole standard.
.. Sau.Ji dt.abian _/11.one.tat.q d-9e.ncq Bankirig Supervision Dept. Quarterly Monitoring and Parallel Runs The quarterly monitoring of SAMA Basel Ill Framework with regard to Leverage Ratios and Liquidity Ratios (LCR and NSFR) will continue as usual, while the monitoring of Basel 111 Capital Ratios will commence effective 1 January 2013 and Banks will submit their first quarterly prudential returns for data as of 31 March 2013 to be sent to SAMA by 30 April 2013. Additionally, banks should be aware of the following aspects regarding parallel runs:
- In order to ensure the accuracy of Basel Ill implementation, parallel runs will be carried out over two quarter ends commencing January 1 to June 30, 2013 for Capital Adequacy Ratios and related details under Basel 11, Basel 11.5 and Basel Ill regarding Regulatory Capital, RWA's, etc.
- The Regulatory Capital framework under Basel II and Basel 11.5 will be eventually discontinued following the parallel runs and only the Ill will continue thereafter. lh:- 6,,,-.., /11,,.f,., Abdulrahman A. Al-Kalaf Deputy Governor for Technical Affairs 3 P.O. Box 2992- Riyadh 11169, Saudi Arabia -Tel.: 01-463 3000-Telex 404390 SJ - Fax 01-466 2119