Chapter X: Supervision of Real Estate Refinance Companies
No: 43083271 Date(g): 26/4/2022 | Date(h): 25/9/1443 Status: In-Force Article 41
The Company shall provide SAMA with prudential data at the specified times as per the forms, controls and instructions set by SAMA.
Article 42
1. The Company shall provide SAMA with its quarterly financial statements, prudential returns, auditor’s report and risk report after being discussed and approved by the risk and credit management committee and the board, along with the decisions made in this regard. These documents must be submitted within (30) working days from the end of the quarter.
2. The Company shall provide SAMA with its audited annual financial statements, auditor’s report and the board’s report within (45) working days from the end of the calendar year.
3. The Company shall provide SAMA with its annual prudential returns within (60) working days from the end of the calendar year.
4. The Company shall immediately report to SAMA any losses exceeding (15%) of its paid-up capital.
5. SAMA may amend the periods specified in this Article when deemed necessary.
Article 43
The Company shall obtain a no-objection letter from SAMA prior to the approval of any distribution of profits. Such distribution must not cause capital adequacy or liquidity to drop below the levels required in accordance with the rules, requirements and standards determined by SAMA.
Article 44
The Company shall obtain a no-objection letter from SAMA prior to the launch of any new finance products or modification of any existing products.
Article 45
1. The Company shall adopt the International Accounting Standards in preparing its accounts and financial statements.
2. The Company shall make provisions for potential losses and risks in line with the International Accounting Standards. SAMA may require the Company to make an additional provision or more to meet potential losses and risks.
3. Subject to the International Accounting Standards, the Company shall define criteria for assets value reduction, provisioning standards and regularly verify their implementation.
Article 46
1. The Company shall obtain a no-objection letter from SAMA before appointing an external auditor.
2. SAMA may require the Company to replace the external auditor or appoint another external auditor at the Company's expense in the following cases:
a. If the business size and nature require so.
b. If the external auditor has committed a breach of professional conduct.
c. If there is a reason to believe that the external auditor has a conflict of interest.
d. If necessary for the protection of the sector or governance considerations and the protection of shareholder’s interest.
3. The external auditor shall immediately report to SAMA all facts of which they obtain knowledge in the course of an audit that could:
a. Justify the reservation in the audit report or the abstention from giving an opinion.
b. Jeopardize the existence of the Company.
c. Seriously impair the Company’s development.
d. Indicate an evidence that the executives violate any of the laws, regulations or instructions applicable in Saudi Arabia or the internal policies and procedures of the Company.
e. Terminate the contract before its expiry, along with the reasons in this regard.
4. SAMA may require the external auditor to explain their report or disclose other facts of which they obtain knowledge in the course of an audit that could indicate a violation of the applicable laws, regulations or instructions or a violation of the by-laws of the Company.
Article 47
1. The Company, its board members and employees shall immediately provide SAMA, upon request, with all information and documents concerning the Company, its activities, shareholders and staff.
2. SAMA may inspect the records and accounts of the Company either by SAMA’s staff or auditors appointed by SAMA, provided that the inspection takes place at the Company’s offices.
3. The Company and its employees shall facilitate the task of whom Sama appoints for inspection particularly as follows:
a. Providing the inspector with the Company’s records, accounts and documents they deem necessary to perform their task.
b. Providing the inspector with information and explanations immediately upon their request.
c. Disclosing any violations or irregularities in the Company’s operations to the inspector at the beginning of their task.
4. The Company shall adhere to the recommendations and instructions given by SAMA to address the observations of inspection visits.
5. The Company and its employees shall not conceal or attempt to conceal any information or irregularities, refrain from answering any inquiries made by the inspector, or delay the submission of requested information and documents.
6. SAMA’s employees in charge of supervision, control, and inspection shall not be vulnerable to any claims as a result of performing their duties.
Article 48
The Company shall bear the expenses of any third party appointed by SAMA to perform any of the procedures taken in line with the provisions of this Chapter.
Article 49
The Company shall publish its audited annual financial statements and the board’s report within a maximum of five working days after being provided to SAMA. It shall also publish any other report that SAMA may request.