Section 3: Money Changer’s Operations
Article 11: Permissible Activities
SAMA shall issue licenses for conducting Money Changing Business. The scope of which shall be limited to:
a. Purchase, sale and trading of foreign currencies inside the Kingdom.
b. Import and export of currencies for Money Changers that are companies or branches of a foreign money changer, provided that a license is obtained for the purchase, sale and trading of foreign currencies inside the Kingdom.
c. Any other activities as may be determined from time to time by SAMA, taking into account other activities that are limited to banks.
Carrying on money transfers inside and outside the Kingdom shall be permitted to the holders of valid licenses from SAMA at the time of the issuance of these Rules. The holders of these licenses are not allowed to open new branches to practice this activity.
Article 12: Prohibited Activities
The Money Changer shall not conduct any unlicensed activity. The Money Changer is prohibited, without limitation, from practicing any of the following:
a. Practicing any other commercial business not approved by SAMA under its capacity and commercial register that was issued for the purpose of conducting Money Changing Business.
b. Opening current, investment, savings accounts or any other accounts for its customers or employees.
c. Issuing letters of guarantees or opening letters of credit or collaterals in any form whatsoever inside and outside the Kingdom.
d. Renting safe deposit lockers.
e. Having an overdraft in its accounts abroad under any circumstances except for cases resulting from the difference in due payment.
f. Accepting deposits or trusts in any form whatsoever whether in cash or in kind.
g. Extending credit, managing a loan or participating in one of such practices or submitting its assets as a collateral.
h. Speculation in foreign currencies, precious metals, stocks, goods, commodities and the like.
Article 13: Cessation of Money Changing Business
The Money Changer shall not fully or partially suspend or end its business, whether in one or more branches, except after obtaining SAMA’s written non-objection in accordance with the conditions it sets, provided that the period of suspension does not exceed three months, and SAMA may extend this period.
Article 14: Obligations and Responsibilities of the Money Changer
a. The Money Changer shall:
1. Conduct Money Changing Business in an adequate place according to the conditions and specifications set by SAMA.
2. Not use the word “bank”, its derivatives, synonyms or any term similar thereto in any language in its documents, publications, commercial address, name or advertisements and shall be committed to use the term “money changing institution” or “money changing company”.
3. Maintain effective oversight over the Money Changing Business and set appropriate controls, policies and work procedures for the Money Changer, including monitoring transactions to identify suspicious and fraudulent ones, in order to ensure compliance with relevant laws, regulations and instructions.
4. Ensure that its policies and procedures are comprehensive and reflect all SAMA regulatory requirements.
5. Adhere to the regulations, operational manuals and risk management policy documents necessary for rendering services to Customers efficiently.
6. Ensure systems’ effectiveness, reliability and security to support its activities.
7. Conduct a periodic independent test, at a minimum once a year, by an internal/external auditor to assess the Money Changer’s operations, including the systems.
8. Record all transactions in the system and prohibit any transaction outside it.
9. Provide adequate technical systems, as a minimum, to manage risks, protect Customers, and combat money laundering and terrorist financing.
10. Maintain a record of all transactions, in accordance with the instructions issued by SAMA in this regard.
11. Maintain and archive data and documents in accordance with the instructions issued by SAMA.
12. For Money Changers licensed to conduct money transfers inside and outside the Kingdom, maintain at all times a full cover for outstanding remittances drawn on their headquarters or correspondents inside and outside the Kingdom to allow payment of the remittance once the order is received.
13. Comply with the safety and security requirements issued by SAMA.
14. Place the license issued by SAMA in a conspicuous place at its head office and branches.
15. Associate the name of the Money Changer with the license number in all of its publications, correspondence and all its statements.
16. Maintain the confidentiality of any information obtained during the course of conducting its business and refrain from disclosing or benefiting therefrom in any manner even after the end of its work except after obtaining SAMA’s prior consent.
17. Set a business continuity plan.
b. SAMA may issue any instructions it deems necessary to implement the supervision and control requirements for Money Changing Business.
Article 15: Outsourcing
Subject to the outsourcing instructions issued by SAMA, the Money Changer shall be responsible for complying with the provisions of these Rules when outsourcing any functions to a Third Party. The Money Changer seeking to outsource some work and functions to a Third Party must:
a. Have an approved outsourcing policy that is periodically reviewed and applied to all outsourcing operations.
b. Ensure that there are no obstacles preventing SAMA from accessing data and inspecting the Third party.
c. Ensure that the Third Party is licensed to practice its commercial activity.
d. Sign a written and fixed-term contract detailing the rights and obligations of both parties.
e. Not deal with any Third Party that is proven to have supplied one of its contracting Money Changers with false or inaccurate information under these Rules.
Article 16: Insurance
The Money Changers are obligated, at all times, to obtain insurance coverage from a licensed insurance service provider in the Kingdom, provided that it covers all property belonging to the Money Changer, including cash and transferable financial instruments of all kinds.
Article 17: Relations with Financial Institutions
Prior to entering into a foreign correspondent relationship or currency import and export contracts, the Money Changer shall inform SAMA in writing and adhere to the following measures in order to mitigate the risks associated with such relationships and contracts:
a. Collecting sufficient information about the contracted financial institution to fully understand the nature of its work and assess its reputation and the type of supervision to which the institution is subject based on the information available to the Money Changer, including whether it has previously been subject to a money laundering or terrorist financing investigation or regulatory action.
b. Evaluating the controls applied by the contracted financial institution to combat money laundering and terrorist financing.
c. Clearly understanding the responsibilities of each financial institution in combating money laundering and terrorist financing.
d. Being sufficiently satisfied that the financial institution does not allow its accounts to be used by shell banks.
e. Complying with all instructions issued by SAMA from time to time.
Article 18: Currency Import and Export
The Money Changer licensed to engage in the activity of currency import and export shall develop regulatory policies and procedures for importing and exporting the currencies, provided that such procedures include, at a minimum, the following:
a. Notifying customs officers at border crossings of the imported and exported amounts of money.
b. Maintaining documents of currency import and export.
c. Preparing funds for their transfer properly.
d. Complying with all the instructions issued by SAMA regarding currency import and export, including not dealing with the entities specified by SAMA.
Article 19: Products and Electronic Services
The Money Changer shall obtain SAMA’s non-objection before providing e-services, introducing a new product or modifying an existing one. Upon submitting the request, the Money Changer must provide SAMA with all information and documents relating to its request and comply with any instructions issued by SAMA in this regard.
Article 20: Governance
The Money Changer shall comply with the governance instructions issued by SAMA.
Article 21: Human Resources
a. The Money Changer must comply with SAMA's instructions relating to the employees of the money changing sector as follows:
1. Complying with the requirements of job Saudization and the requirements of contracting with employment service companies according to the instructions issued by SAMA.
2. Adhering to SAMA’s instructions regarding working hours, leaves and official holidays.
3. Complying with SAMA's instructions regarding the requirements for appointment to senior positions.
b. The Money Changer shall provide an administrative structure including all departments and functions and specifying tasks of the departments as well as duties and responsibilities of each individual. In addition, a qualified compliance officer shall be appointed.
Article 22: Training of Money Changer’s Staff
The Money Changer shall train its employees on a regular and ongoing basis to improve their efficiency and keep abreast of developments and the instructions issued by SAMA.
Article 23: Head Office and Ownership Structure
The Money Changer shall obtain SAMA’s non-objection prior to:
a. Opening a branch or more to practice Money Changing Business, and in this case, the non-objection is limited to the Money Changers that take the form of a company or a branch of a foreign money changer.
b. Owning or renting a head office to conduct Money Changing Business.
c. Relocating or closing the head office, one of the branches or any other platform, provided that the application is submitted to SAMA at least thirty (30) days before the set date. After obtaining SAMA’s non-objection, the Money Changer must make an announcement regarding the relocation or closing of the head office, branch or platform for the public to see it clearly at all times.
d. Making any change in the structure or ownership of the capital.
e. Making any amendment to the Money Changer’s memorandum of association or articles of association for the Money Changers that take the form of a company.
Article 24: Information Technology (IT) and Operational Requirements
The Money Changer shall, at a minimum, ensure the following:
a. The technology deployed comprises a set of interoperable infrastructure modules that work seamlessly and harmoniously. There must be a direct connection among the branches of the Money Changer.
b. An electronic record that includes transactions is maintained and is submitted to SAMA upon request.
c. Adequate measures are in place to mitigate all the risks that could arise from the deployment and use of its IT infrastructure.
d. The IT infrastructure is physically and logically secure and can achieve the main goal of automation and electronically provide services in a comprehensive manner.