Regulatory Alerts2018-04-05
Optional Adherence by Financing Companies to Certain Articles When Dealing with Small, Medium, and Large Enterprises
The Saudi Central Bank issued this circular to permit financing companies operating in the Kingdom to optionally comply with Articles 78, 79, 81, 82, 83, and 84 of the Executive Regulations of the Financing Companies Control System when transacting with small, medium, and large enterprises. The directive clarifies that the applicable definitions for these enterprise categories align with those established by the General Authority for Small and Medium Enterprises (Monsha'at) in Decision No. (2-1-1438) dated 14/03/1438H. This regulatory flexibility aims to foster legitimate competition and operational fairness within the financing sector while maintaining overall market stability.
In the name of Allah, the Most Gracious, the Most Merciful Saudi Central Bank Head Office General Directorate of Supervision of Financing Companies Ref No.: 391000081077 Date: 19/07/1439H Attachments:
Circular
Dear Sirs, Peace, mercy, and blessings of Allah be upon you, Subject: Optional Adherence by Financing Companies to Certain Articles When Dealing with Small, Medium, and Large Enterprises
Based on the powers granted to the Bank under the Financing Companies Control System issued by Royal Decree No. (M/51) dated 13/08/1433H, and based on Article Two of the Executive Regulations of the Financing Companies Control System issued by Governor's Decision No. 2/FC dated 14/04/1434H, which stipulates: "The Bank shall regulate the financing sector and supervise the operations of financing companies in accordance with the System and Regulations, including the following: 2- Taking the necessary measures to preserve the safety, stability, and fairness of transactions in the financing sector. 3- Taking the necessary measures to encourage legitimate and fair competition among financing companies. 4- Issuing the necessary rules and instructions to regulate the operations of the financing sector."
I wish to inform you that the Bank has decided the following: First: Financing companies may optionally adhere to Articles (78, 79, 81, 82, 83, 84) of the Executive Regulations of the Financing Companies Control System when dealing with small, medium, and large enterprises. Second: The term "small, medium, and large enterprises" refers to the definitions set forth in the Bank's Circular No. 381000064902 dated 16/06/1438H, which references the General Authority for Small and Medium Enterprises (Monsha'at) Board of Directors Decision No. (2-1-1438) dated 14/03/1438H regarding the adoption of definitions for small and medium enterprises operating in the Kingdom.
Yours sincerely,
Ahmed bin Abdullah Al Sheikh Deputy Governor for Supervision
Distribution Scope:
- Financing companies operating in the Kingdom.
P.O. Box 2992, Riyadh 11169, Phone: +966 1 4662020, Fax: +966 1 4662488