Chapter II: Licensing Provisions
Article 5: License Application
The applicant for a license to practice finance support activities shall submit the license application to SAMA. The request shall specify the activities to be licensed, and shall be attached with the following:
1- a completed license application in the form provided by SAMA;
2- memorandum of incorporation and articles of association (if any) of the company;
3- a list of founding members or shareholders and partners and the shares they own in the company and the percentage thereof; an irrevocable bank guarantee, if the applicant is a company in the process of incorporation, with an amount equivalent to the minimum capital for the support activity(ies), issued in favor of SAMA by a domestic bank and automatically renewed until the capital is paid in full. This guarantee shall be released upon the request of the founding members in the following cases:
i. if the capital is paid in cash;
ii. if the license application is withdrawn; or
iii. if the license application is rejected by SAMA.
4- draft agreements and proposed contracts with third parties; and
5- Any other documents, data, and information required by SAMA.
Article 6: Paid-Up Capital
1. Pursuant to the provisions of the Companies Law, the minimum capital for the finance support company shall be as follows:
a) (SAR 2,000,000) for aggregation activity.
b) (SAR 10,000,000) for debt collection service providers.
c) SAMA shall set the minimum capital for the finance support company that engages in other support activities approved by SAMA.
2. SAMA may stipulate higher or lower minimum capital based on the prevailing market conditions, or if it deems that the proposed business model or the nature of activities or the proposed geographical scope requires so, taking into consideration the risk profile of the activity.
Article 7: Management Requirements
All candidates for supervisory and executive positions in a finance support company must:
a) meet the professional legal competence requirements set by SAMA;
b) be permanent residents in Saudi Arabia;
c) be professionally qualified, and have appropriate experience in the same field;
d) not have violated any of the provisions or regulations of the Capital Market Law, the Banking Control Law, the Cooperative Insurance Companies Control Law or Finance Laws; and
e) not have been previously convicted of an offense impinging upon integrity, unless rehabilitated in accordance with the laws or the Implementing Regulations of the Finance Companies Control Law.
Article 8: Initial Approval
Within thirty (30) working days from completion of requirements, SAMA shall grant either an initial approval or a justified rejection. SAMA will assess the competitiveness and soundness of the industry and the quality of services provided.
Article 9: Provision of Required Information
1- The license applicant shall provide any additional information or documents required by SAMA within (15) working days.
2- In case of failure to meet the period requirement specified in Paragraph (1) of this Article, SAMA may reject the license application.
Article 10: Establishment
The founding members shall establish the finance support company within (6) months from SAMA’s initial approval, and provide SAMA with a copy of the company’s commercial register stating the licensed activities for initial approval. The initial approval will expire after (6) months, unless SAMA agrees to extend the period.
Article 11: License
1- SAMA may take the necessary actions to ensure that the finance support company meets SAMA’s requirements, such as making supervisory or inspection visits to the company headquarters, meeting its executives and reviewing its systems, procedures and records.
2- Upon verification of the applicant compliance with the requirements set forth herein, SAMA shall issue the license for finance support activities.
3- The finance support company shall not engage in any activity not licensed by SAMA.
4- Debt collection service providers shall not buy the debts of finance institutions.
Article 12: Scope of License
The license shall specify the activities that the finance support company is licensed to carry out, and SAMA may restrict the license to special conditions.
Article 13: Validity of License
The license shall be valid for three (3) years and may be renewed by SAMA upon the request of the company. The company shall submit a written renewal request to SAMA at least (3) months prior to the expiration of the license.
Article 14: Amendment of License
The finance support company may request to amend the license, or to amend any condition or limitation in the license, provided that such request is based on reasonable justifications. Any documents, information or studies required by SAMA shall be attached to the request.
Article 15: Revocation of License
SAMA may revoke the license in the following cases:
1- Upon the request of the finance support company, taking into account the rights of the creditors and beneficiaries as well as the soundness of the financial system.
2- If the finance support company has submitted false information or failed to disclose material information that should have been provided for licensing purposes.
3- If the finance support company has violated the requirements of these Rules, the provisions of finance laws, or SAMA’s instructions.
4- If the finance support company has not carried out the licensed activities within (6) months from the date of issuance of license.
5- If the operations of the finance support company have been suspended for more than (3) consecutive months, or for (6) non-consecutive months without obtaining SAMA’s prior written no-objection.
Article 16: License Expiry
The license shall be legally expired in the following cases:
1. Non-renewal of expired license;
2. Appointment of liquidator for the finance support company; or
3. Commencement of bankruptcy proceedings under the Bankruptcy Law.
Article 17: Effects of License Revocation or Expiry
Revocation or expiry of license shall result in liquidation of the finance support company. Such company shall be notified in writing of license revocation, and shall be given a period of (6) months to conduct liquidation. SAMA may also appoint a liquidator.