II. Applicability of the Rules
C. Level of Application
4. The rules are applicable to banks licensed under the Banking Control Law (Royal Decree No. M/5 dated 22/2/1386 H), including all branches of local and foreign banks and banking subsidiaries ("Banks") located in Saudi Arabia. The banks are required to ensure that their branches and subsidiaries located overseas are aware of these rules.
D. Scope
5. The rules set out in this document enumerate SAMA's requirements of banks that have entered or are planning to enter into outsourcing arrangements. These rules are applicable to all outsourcing arrangements with domestic as well as foreign third party and related party (in the case of foreign bank branches) service providers.
6. Insourcing contracts utilizing third party personnel under the direct supervision, control and management of Banks are exempt from the purview of these outsourcing Rules.
7. In addition to the above, the following are examples of activities that are not considered as part of outsourcing arrangements:
a) Contractual arrangement with market information data providers (e.g. provision of data by Bloomberg, Moody's, Standard & Poor's, Fitch).
b) Clearing and settlement arrangements between clearing houses, central counterparties and settlement institutions and their members.
c) Correspondent banking relationship arrangements.
d) Utilities services (e.g. electricity, gas, water, telephone line).
E. Related Regulations and "No Objections" Requirements
8. While deciding to outsource any function, banks should ensure that outsourcing does not reduce the protection available to depositors nor be used as a way of avoiding compliance with regulatory requirements. It is the responsibility of the bank to continue to satisfy all regulatory and legal requirements when entering into any outsourcing arrangements.
9. Banks are not allowed to outsource any services or activities mentioned in article 19 of the Regulation of Agent Banking that has been issued under circular No. 37541/67 dated 15/06/1440 H).
10. Banks are explicitly required to obtain a written "no objection" from SAMA for Material outsourcing to Third Party Service Providers.