Chapter II: Licensing Provisions
Article 5: License Requests
The Debt-Based Crowdfunding Company wishing to be licensed shall submit the license request to SAMA. Such request shall be accompanied by the following:
1- A completed license application form as provided by SAMA.
2- Articles of association.
3- A list of the founding members or shareholders, including the number and percentage of shares of each member or shareholder in the Company.
4- The Fit and Proper Form for founding members or shareholders, signed by every founding member or shareholder.
5- The Fit and Proper Form for board members, signed by every candidate for board membership.
6- An irrevocable bank guarantee for an amount equivalent to the minimum capital, issued in favor of SAMA by a bank licensed to operate in Saudi Arabia and renewed automatically until the capital is paid in full, if the license application is submitted for a company under establishment. Such guarantee shall be released upon the request of the license applicant in any of the following cases:
i. If the capital is paid in cash.
ii. If the license request is withdrawn.
iii. If the license request is rejected by SAMA.
7- Draft agreements and proposed contracts with third parties.
8- The proposed business model of the Debt-Based Crowdfunding.
9- Any other documents, data, records or information required by SAMA.
Article 6: Capital
1- Subject to the provisions of the Companies Law, the minimum capital for the Debt-Based Crowdfunding Company shall be SAR 5,000,000 (five million Saudi riyals).
2- Taking into consideration the associated risks of the activity and their nature, SAMA may increase or decrease the minimum capital based on the prevailing market conditions or if it deems that the Company’s proposed business model or the nature of its activity requires so.
3- The Debt-Based Crowdfunding Company shall obtain a written non-objection letter from SAMA before disposing of significant shareholders’ shares, stakes or shares of indirect ownership that affect 5% or more of the Company’s shares or voting rights.
Article 7: Senior Management Requirements
All candidates for supervisory and executive positions in a Debt-Based Crowdfunding Company must:
a. Meet the professional eligibility requirements set by SAMA.
b. Be permanent residents of the Kingdom of Saudi Arabia.
c. Be professionally qualified and have sufficient experience in the field.
d. Have not violated any of the provisions of the Banking Control Law, the Cooperative Insurance Companies Control Law, finance laws, or the Capital Market Law and its Regulations.
e. Have not been previously convicted of an offense impinging upon integrity, unless rehabilitated in accordance with applicable laws.
f. Have the sufficient solvency, and have not breached any financial obligations towards their creditors nor have given an indication that they cannot continue to meet their financial obligations towards their creditors.
Article 8: Providing SAMA with the Information Required
1- The license applicant shall provide SAMA with any additional information or documents required within (30) working days
2- Without prejudice to the provisions of the relevant regulations and instructions, SAMA may reject the application if it fails to meet the period requirement specified in Paragraph (1) of this Article, or if SAMA is provided with incorrect or false information or documents.
Article 9: Application Completeness
SAMA notifies the applicant of the application completeness upon fulfilling all requirements set forth in the Law and these Rules.
Article 10: Initial Approval or Rejection
SAMA informs the applicant of the initial approval or justified rejection within (60) working days from the date the applicant receives notification of application completeness. SAMA’s initial approval shall not be considered a license or permission for companies to engage in Debt-Based Crowdfunding..
Article 11: Requirements for Company Incorporation and Business Activity Registration
1- For a company under establishment, the founding members shall complete the requirements necessary to practice Debt-Based Crowdfunding within six months from the date of SAMA’s initial approval and provide SAMA with a copy of the Company’s commercial register stating the Debt-Based Crowdfunding activity, and a copy of the Company’s articles of association. In case of failure to complete the requirements set out in this paragraph within the specified period, the initial approval shall be deemed expired. In addition, SAMA may extend the period before its expiration for another six months as a maximum.
2- For an existing company, SAMA shall be provided with a copy of the company’s commercial register stating the Debt-Based Crowdfunding activity within six months from the date of SAMA’s initial approval. In case of failure to submit the requirement set out in this paragraph within the specified period, the initial approval shall be deemed expired. In addition, SAMA may extend the period before its expiration for another six months as a maximum.
Article 12: License
1- SAMA may take any necessary actions to verify that the license applicant for Debt-Based Crowdfunding meets the requirements. Such actions include making on-site visits, meeting the holders or candidates of senior positions, and reviewing the regulations, procedures and records.
2- SAMA issues a decision to grant the applicant a license to engage in Debt-Based Crowdfunding upon fulfillment of all established requirements and procedures.
3- The Debt-Based Crowdfunding Company shall not engage in any other finance activity that the Company is not authorized to practice, unless SAMA’s written approval is obtained for such activity.
Article 13: License Term
The license shall be valid for five years and may be renewed by SAMA upon the request of the Debt-Based Crowdfunding Company. In such case, the Company shall submit a written renewal request to SAMA at least three months prior to the expiration of the license.
Article 14: Revocation of License
SAMA may revoke the license in any of the following cases:
1- Upon a written cancellation request submitted by the Debt-Based Crowdfunding Company, taking into account the rights of the Participants and Institutional Beneficiaries as well as the soundness of the financial system.
2- If it is proved that the Debt-Based Crowdfunding Company has provided SAMA with false information or failed to disclose material information that should have been provided for licensing purposes.
Article 15: License Fees
SAMA may charge fees as follows:
1- SAR 5,000 for license issuance.
2- SAR 2,000 for license renewal or amendment.