Investment
Article Fifty-Nine
The Company shall:
1. Formulate a written investment policy, approved by the Board of Directors, which governs its investment operations and the methods of managing its investment portfolios.
2. The company shall invest 50% of its total invested assets in Saudi Riyals. SAMA’s written approval is required if the Company wishes to reduce this percentage.
Article Sixty
The Company shall have a written investment diversification policy taking into consideration all risks faced by the company and the environment that it operates under. The Company shall take the necessary measures to manage the following risks as a minimum:
1. Market risk.
2. Credit risk.
3. Interest rate risk.
4. Currency exchange risk.
5. Liquidity risk.
6. Operations risk.
7. Country risk.
8. Regulatory and legal risk.
9. Re-insurance risk.
10. Technology Risk.
Article Sixty-One
1. The Company shall, when formulating its investment policy, take into consideration that the maturity of its invested assets is in concurrence with its liabilities according to the issued policies. The Company shall provide SAMA with an investment policy inclusive of assets distribution. If such investment policy was not approved by SAMA, the Company shall adhere to the investment standards in Table (1), provided that investments outside the Kingdom shall not exceed 20% of the total investment and in accordance with Article 59 (2).
2. The Company shall take in consideration the investment concentration risks. Concentration in an investment instrument shall not exceed 50% in one investment instrument mentioned in table (1).
Article Sixty-Two
The Company shall not use financial instruments, such as derivatives and off-balance-sheet items, other than for efficient portfolio management and with SAMA’s written approval. The Company is permitted to invest in such instruments when these conditions are met:
1. Such derivatives must be listed on a financial exchange, are capable of being readily closed out, are based on underlying admissible assets and have a prescribed pricing basis.
2. The company has set aside assets that can be used to settle any obligations under these derivatives and set adequate provisions for any adverse changes on the derivatives and their coverage.
3. The counter party must be reputable and in an acceptable financial condition.