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  • Chapter Eight Compliance

    • Article 38

      A Consumer Microfinance Company must comply with applicable laws, regulations and instructions. It must also take the necessary measures and procedures to avoid breaching its provisions.

    • Article 39

      A Consumer Microfinance Company shall: 
       
       1.establish an independent department or a compliance function and assign a head of compliance reporting directly to the audit committee, and the audit committee must raise their views about compliance reports to the board;
       
       2.develop a written compliance policy approved by the board, which sets out the powers, obligations and responsibilities of the compliance department as well as compliance programs and related processes. The audit committee must ensure the implementation of the compliance policy, evaluate its effectiveness, update it and propose the necessary amendments to it on an annual basis; and
       
       3.take the necessary procedures to ensure that the compliance policy referred to in paragraph (2) of this Article is adhered to.
       

    • Article 40

      1.Based on the recommendation of the audit committee, a head of compliance shall be appointed by the board after obtaining a non-objecting letter from SAMA.
       
      2.The head of compliance acts independently regarding his/her tasks, and he/she may not perform any other administrative responsibilities.
       

    • Article 41

      The head of compliance must submit a compliance report to the audit committee semi-annually and then to the board for review. The compliance report must identify the main compliance-related risks facing the Consumer Microfinance Company, analyze existing processes and procedures and assess their viability, and suggest any amendments or changes.

    • Article 42

      The compliance department must have staff and resources commensurate with the business model and size of the Consumer Microfinance Company. Compliance employees must only report solely to the head of compliance.

    • Article 43

      The compliance department must ensure the Consumer Microfinance Company’s compliance with applicable laws, regulations and instructions. It shall particularly perform the following tasks: 
       
       1.identify and deal with all compliance risks and monitor all relevant developments;
       
       2.analyze new procedures, policies and operations and suggest procedures to address relevant compliance risks;
       
       3.follow a risk-based compliance program and include its findings in the report referred to in Article (41) of these Rules;
       
       4.collect compliance-related complaints and formulate written guidance to staff, where necessary;
       
       5.draft internal policies and procedures to combat financial crimes, such as money laundering and terrorism financing;
       
       6.monitor compliance with anti-money laundering and anti-terrorism financing laws, regulations, and rules;
       
       7.promote awareness of compliance issues and provide training to employees on compliance-related matters through periodic programs; and
       
       8.immediately report to SAMA and the audit committee in case of revealing any irregularities or violations.
       

    • Article 44

      A Consumer Microfinance Company, shall comply with the legal requirements mentioned in the Anti-Money Laundering Law, the Law on Terrorism Crimes and Financing, their Implementing Regulations, and the relevant instructions and guidelines as specified by SAMA, in a manner that is consistent with the nature and size of this company’s activity and risks it may be exposed to. A Consumer Microfinance Company, shall also comply with the requirements and instructions issued by SAMA on financial crimes and fraud.