| 12. | If a bank has not previously acted as a Receiving Bank in an IPO, or is wishing to act as a Receiving Bank in a large-scale IPO or a government offering, the bank shall notify SAMA in advance and, in particular, prove its financial and operational capacity to process the share applications in accordance with Paragraph 11-b above. It shall also prove its ability to manage the subscription amounts and recycle the application monies in the money market when needed.
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| 13. | If a bank intends to act as a Receiving Bank in a large-scale IPO or Government Offering, it shall have sufficient experience and a track record in acting as a Receiving Bank.
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| 14. | Banks shall give proper consideration to the number and readiness of branches or any other channels to be designated as channels for receiving subscription applications, and ensure the adequacy of arrangements to meet the expected demand of subscribers.
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| 15. | The bank shall ensure that it is fully qualified and conversant with IPO process, while ensuring concentrating its resources and effecting its relevant policies. For large-scale IPOs or government offerings, the bank shall establish a temporary internal committee to coordinate the receipt of information on the subscription and escalate to senior management if necessary.
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| 16. | In determining whether an IPO is of a large scale for the bank for the purposes of paragraphs 12, 13 and 15 above, the bank shall benchmark the scale of the IPO against its own financial capacity (capital base) by multiplying the expected share price by the number of shares to be issued and dividing the result by the bank’s Tier 1 regulatory capital. If the resulting percentage is equal to or greater than 100%, the IPO will be considered of large scale. Factors to be considered include the estimated value of subscription monies to be recycled, the general trends in the stock market during the IPO, and the expected level of demand from subscribers.
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| 17. | The Receiving Bank shall agree in advance with the Issuer and approve a plan to deal with the high levels of demand for purchasing Securities in the IPO process. The plan must include - at least - the following considerations:
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| | a. | Possibility of adding branches to receive subscription applications if needed, including making relevant announcements.
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| | b. | Possibility of using another Receiving Bank to assist in receiving or processing applications.
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| | c. | Possibility of extending working hours to receive applications, if possible.
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| | d. | Arrangements for printing and distributing additional copies of subscription application forms and prospectuses, if needed.
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| | e. | Arrangements to hire additional staff, if necessary.
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| 18. | The Receiving Bank shall work closely with the Issuer during the IPO process to determine the need for contingency measures in accordance with the approved plan, as required.
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