Part Nine: Compliance
Article 41
The Finance Company must comply with applicable laws, regulations and instructions. It must also take the necessary measures and procedures to avoid breaching its provisions.
Article 42
The Finance Company must:
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 rights, obligations and responsibilities of the compliance department, as well as compliance programs and related processes of the compliance function. 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 43
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 thereupon. 2. The head of compliance acts independently, regarding his tasks and he may not practice any other administrative responsibilities. Article 44
The head of compliance must submit a compliance report to the audit committee and thereafter to the Board for review on quarterly basis at least. The compliance report must identify the main compliance-related risks facing the Finance Company, analyze existing processes and procedures and assess their viability and, suggest any amendments or changes thereto.
Article 45
The compliance department must have staff and resources commensurate with the business model and size of the Finance Company. Compliance employees must report solely to the head of compliance.
Article 46
The compliance department must ensure the Finance Company’s compliance with applicable laws, regulations and circulars. It has, without limitation, the following tasks:
1. Identifying and dealing with all compliance risks and monitoring all relevant developments; 2. Analyses new procedures, policies and operations. and suggesting the procedures to address relevant compliance risks; 3. Following a risk-based compliance program and including its findings in the report referred to in Article 44 of this Regulation; 4. Collecting compliance complaints and formulates written guidance for staff, where necessary; 5. Drafting internal policies and procedures to combat financial crimes, such as money laundering and terrorism financing; 6. Monitoring compliance with all applicable anti-money laundering and anti-terrorism financing laws, regulations, and rules; 7. Promoting awareness of compliance issues and providing training for employees on compliance related matters through periodic programs; and 8. Reporting any irregularities and/or violations promptly to SAMA and the Audit Committee. Article 47
The Finance Company must develop internal policies and procedures of anti-financial crimes, specifically money laundering and financing terrorism. Therefore, the standards of (Know Your Client) should be applied and taking the necessary actions to report to the financial investigation unit of any suspected activities or processes.