Promoting Use of Legal Entity Identifier and Facilitating Obtaining it Through Financial Institutions

Saudi Central Bank (SAMA)

Circular

To Whom It May Concern,

Subject: Promoting the Use of Legal Entity Identifiers and Facilitating Their Obtaining Through Financial Institutions.

Reference is made to the regulatory authorities vested in SAMA to supervise and regulate financial institutions based on its system issued by Royal Decree No. (M/36) dated 11/4/1442H, and in accordance with related systems and regulations. Furthermore, following SAMA Circular No. (19636/67) dated 23/3/1441H, which stipulates the obligation for all financial institutions, their affiliated entities, and branches of foreign financial institutions operating in the Kingdom under SAMA's supervision to obtain a Legal Entity Identifier (LEI) from one of the operating units approved by the Global LEI Foundation (GLEIF).

In pursuit of SAMA's support for establishing a unified system that serves the Kingdom in applying best practices for risk management and financial stability, enhancing transparency in financial markets in line with the objectives of Saudi Vision 2030, contributing to fulfilling the Kingdom's international obligations arising from its G20 membership, and strengthening the Kingdom's global standing. Furthermore, to facilitate the issuance and renewal services of Legal Entity Identifiers (LEI), thereby enabling financial sector institutions to identify and professionally assess potential risks, contributing to the stability and recovery of the financial sector. Accordingly, it has been decided as follows:

1. The Legal Entity Identifier shall be valid and up-to-date for financial institutions under SAMA's supervision, affiliated entities of financial institutions, and branches of foreign financial institutions operating in the Kingdom, as referenced in SAMA Circular No. (19636/67) dated 23/03/1441H.

2. Financial institutions are permitted to sign an agreement titled "Issuance, Update, and Renewal of Legal Entity Identifiers Through a Financial Institution" (Mawafiq) with the Saudi Credit Bureau Company "SIMAH", in its capacity as the approved local operator for the Legal Entity Identifier system, which includes registration, update, and renewal services for all current and potential business sector clients. This enables these financial institutions themselves to issue, update, and renew Legal Entity Identifiers on behalf of business sector clients (current and/or potential) in accordance with the terms of the agreement approved by SAMA.

Furthermore, SAMA requires financial institutions to ensure that their policies and procedures include obtaining Legal Entity Identifiers for all business sector clients prior to granting credit, that the identifier remains valid and up-to-date throughout the relationship period, and that obtaining it serves as a supportive tool for customer identification and risks associated with their transactions.

For response and implementation effective from its date. In case of any inquiries regarding this matter, contact may be made via the following email: (SLEI@SAMA.GOV.SA).

Yours sincerely,
Fahd bin Ibrahim Al-Shathri
Deputy Governor for Supervision

Distribution Scope:

• Financial institutions under the supervision of the Saudi Central Bank.

P.O. Box 2992 Riyadh 11169, Kingdom of Saudi Arabia Tel: +966 11 463 3000

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SIMAH Agreement Template Header

By the grace of God, on day ………… of month ………… for the year 1443H corresponding to ………… of month ………… for the year 2021M, an agreement was concluded between:

(A) The Saudi Credit Bureau Company (SIMAH), a closed joint-stock company, with a paid-up capital of 200,000,000 SAR, Commercial Registration No. 11492067, Membership No. 10010171, Tel: 115731, Fax No.: 8003010046, National Address: Riyadh - Al-Shahed District, Building No. 2596, Unit No.: 7347, Additional No.: 13241, Postal Code: [KSA]. Subject to the supervision and regulation of SAMA under License Decision No. 37/2. Referred to in this agreement as "Party A or SIMAH". (B) ………………………………, in the capacity of ……………………………… and referred to in this agreement as "Party B or …………………". Reference is made to Party A or Party B collectively as "(the Parties or the Party)".

Whereas Party A -a local operating unit- is approved by the Global LEI Foundation (GLEIF) to register and renew Legal Entity Identifiers for entities under the LEI system in accordance with regulatory frameworks, a memorandum of understanding (MOU), and an agreement between the two parties regarding GLEIF and entities under SAMA, as well as this matter, along with regulations issued by SAMA; and whereas Party B is a financial institution ………… that possesses data on corporate and legal entity clients, with all its operations subject to SAMA's supervision and regulation, and conducts credit granting activities.

And whereas SAMA issued Circular No. ………… dated …………, addressed to all banks and financial institutions, permitting the signing of an agreement titled "Issuance, Update, and Renewal of Legal Entity Identifiers Through a Financial Institution" with the Saudi Credit Bureau Company (SIMAH) as the approved local operator for the Legal Entity Identifier system, which includes registration, update, and renewal services for all current and/or potential business sector clients in applying best practices for risk management and financial stability, and contributing to fulfilling the Kingdom's international obligations arising from its G20 membership.

In line with the aforementioned, and to achieve the desired objectives on one hand and strengthen the strategic partnership between the two parties on the other; Party A presented its desire to provide issuance, update, and renewal services for Legal Entity Identifiers for Party B's clients (current and/or potential), which Party B approved and expressed its desire for. Accordingly, both parties, possessing full legal and regulatory capacity, have agreed as follows:

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Article One / Preamble
The aforementioned preamble is an integral part of this agreement, supplements its articles, precedes them, and forms the basis for it.

Article Two / Purpose of the Agreement
To enable Party B, through Party A, to issue, update, and renew all Legal Entity Identifiers for all its clients.

Article Three / Term of Agreement
-1. The term of this agreement is one year starting from the date of signing, and automatically renews for a similar or same duration unless either party notifies the other in writing of its intention not to renew at least one month prior to the agreement's expiration.
-2. The termination provisions of this agreement are subject to SAMA directives.

Article Four / Obligations of the Parties
-1. Party A is obligated to enable Party B to issue, update, and renew Legal Entity Identifiers for Party B's clients through a shared electronic gateway between the two parties.
-2. In accordance with its credit policies and upon desiring to obtain services related to Legal Entity Identifiers, Party B is obligated to:
a. Issue Legal Entity Identifiers upon request from its corporate clients – through the local operating unit for Legal Entity Identifiers. b. Renew Legal Entity Identifiers after obtaining approval from corporate clients and in accordance with credit policies, in case of expiration or modification of an identifier. -3. Party B shall execute the provisions in paragraph (2) of this article on behalf of its clients under a notarized power of attorney. -4. When requesting issuance, renewal, or update for a Legal Entity Identifier, Party B is obligated to provide all supporting information and documents, including necessary corrections, as stipulated in Party A's guidebook and its periodic amendments. -5. Party A is obligated to conduct workshops with Party B for training on the mechanism for obtaining and applying for the service. -6. Party B is obligated to cooperate with Party A in educating its corporate and institutional clients regarding the Legal Entity Identifier system, its achieved objectives, and encouraging them to obtain and renew it. -7. Provided that the data and information submitted to Party A are correct, accurate, and complete, Party A is obligated to bear any obligations or liabilities arising from Party B's provision of the service on behalf of Party A, and no adverse effects shall be raised against Party B resulting from correctly registering clients in the Legal Entity Identifier system. -8. Party A is obligated to prepare brochures, contracts, and other documents required for client signature, ensuring that the contracts clarify the client's acknowledgment of registration through Party B and indicate the client's consent to data updates.

Article Five / Fees and Costs
-1. Party B is obligated to collect and pay the Legal Entity Identifier fees to Party A according to the following table:
-2. Party B is obligated to pay all dues related to the services mentioned in paragraph (1) by the end of each Gregorian month, according to invoices.
-3. Submitted by Party A to Party B, with the payment period not exceeding ten business days from the date of delivery of the invoice by Party B.

Request	Price
Legal Entity Identifier (LEI) Issuance Request	200 SAR
Legal Entity Identifier (LEI) Renewal Request	200 SAR

-3. The costs stated in this article do not include Value Added Tax (VAT).

Article Six / General Provisions
-1. Party B is obligated to preserve and protect any data or information from Party A in accordance with the obligations and controls stipulated in the Credit Information System, its executive regulations, and directives issued by SAMA regarding cybersecurity from time to time. -2. The Gregorian calendar is adopted for implementing the provisions of this agreement, unless otherwise agreed in special cases. -3. No amendment to this agreement or any of its terms shall be considered valid unless it is in writing and signed by the authorized representatives of both parties. -4. In case of a defect or invalidity in any part of this agreement, the defect or invalidity is confined to the scope of the stipulated condition or obligation, and does not extend to any terms or clauses of the agreement wholly or partially. The defect must be corrected or the invalid portion waived, after which the remaining provisions shall continue to apply. -5. The address mentioned at the beginning of the agreement is the official address for both parties, to which all correspondence between them shall be directed. Correspondence sent there constitutes official notification. The rules of receipt and delivery remain applicable, and the parties may determine an alternative correspondence mechanism by written agreement.

Article Seven / Governing Law and Dispute Resolution
In the event of any disagreement or dispute – God forbid – regarding the application or interpretation of this agreement, it shall be resolved within ten business days from the date the difference arises. If not resolved, the judicial authorities in the Kingdom shall be deemed competent to resolve the dispute.

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Article Eight / Copies of the Agreement
This agreement was executed in two original copies in Arabic, and each party shall receive one copy for implementation and execution of its contents.

Party A
The Saudi Credit Bureau Company (SIMAH)
Chief Executive Officer
Mr. Suweid bin Mohammed Al-Zahrani

Party B
……………………………
Mr. ……………………

/ Signature
/ Signature

P.O. Box 2992 Riyadh 11169, Kingdom of Saudi Arabia Tel: +966 11 463 3000