Positions Intended for Directors of Main Departments in Finance Companies or Their Representatives

In the name of Allah, the Most Gracious, the Most Merciful Saudi Central Bank Head Office

General Directorate for Supervision of Finance Companies
No.: ....................................................
Date: 1440/05/17
Attachments: None

Circular

Dear Sirs,
Peace, mercy, and blessings of God be upon you,

Subject: Regarding the Meaning of Directors of Main Departments in Finance Companies or Their Representatives, for Which the Institution’s Non-Objection Must Be Obtained Prior to Appointment.

With reference to Article 69 of the Executive Regulations of the Finance Companies Control System, which stipulates that "a finance company must obtain a letter from the Institution stating its non-objection prior to appointment to the following positions and duties: 1. Membership on the Board of Directors and its subsidiary committees. 2. The Managing Partner, Chief Executive Officer, General Manager and their deputies, the Chief Financial Officer, directors of main departments, or their representatives. 3. Directors of oversight functions, such as Internal Audit, Risk Management, and Compliance, or their representatives." Without prejudice to the appointment requirements for leadership positions in financial institutions under the supervision of the Saudi Central Bank, issued pursuant to Circular No. 341000115396 dated 25/09/1434H, the Financial Sector Information Security Regulatory Guide issued pursuant to Circular No. 381000091275 dated 28/08/1438H, and the Institution’s Circular No. 391000083333 dated 26/07/1439H regarding the controls for establishing a Customer Care Department in finance companies. And based on the differing practices observed in previous periods regarding the determination of directors of main departments in finance companies or their representatives, for which finance companies are required to obtain the Institution’s non-objection prior to appointment.

The Institution wishes to clarify that the term "directors of main departments or their representatives" wherever it appears in the Executive Regulations of the Finance Companies Control System refers to the directors of the following functions and those equivalent to them, or their representatives: (Director of Credit Function, Director of Operations Function, Director of Anti-Money Laundering Function, in the event it is independent from the Compliance Director). As for directors of functions reporting directly to the Company’s Chief Executive Officer, other than those mentioned above, notifying the Institution upon appointment or resignation is sufficient.

Yours sincerely,

Fahd bin Ibrahim Al-Shathri
Deputy Governor for Supervision

Distribution Scope

• Finance companies licensed by the Institution.

P.O. Box 2992, Riyadh 11169, Phone: +966 1 4662020, Fax: +966 1 4662488