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  • FAQs

    • Frequently Asked Questions on SAMA's Pillar 3 Disclosure Requirements Framework

      For Frequently Asked Questions on SAMA's Pillar 3 Disclosure Requirements Framework, click here.

    • Frequently Asked Questions on Benchmark Reform- BCBS

      This circular is currently available only in Arabic, please click here to read the Arabic version.

    • SAMA's Comments Concerning Amended LCR - FAQs

    • IRRBB Frequently Asked Questions and Answers Including National Discretions

    • Basel III - The Net Stable Funding Ratio (NSFR) Frequently Asked Questions

      The Basel Committee has received a number of interpretation questions related to the October 2014 publication of the NSFR standard. In order to promote consistent global implementation of these requirements, the Basel Committee periodically reviews frequently asked questions and publishes answers along with any necessary technical elaboration of the rules text and interpretative guidance, if needed. The recently issued document deals with these Frequently Asked Questions (FAQs) and answers on Basel Ill's Net Stable Funding Ratio (NSFR). 
       

    • Basel III Counterparty Credit Risk - Frequently Asked Questions- BCBS

       

      FAQs related to Basel III definition of capital have been consolidated in the Basel III definition of capital- Frequently asked questions.

       As you are aware, Saudi Central Bank has issued the following main documents relating to Basel III Reforms.

      1. Basel III: A Global Regulatory Framework for More Resilient Banks and Banking System under Circular# BCS 1278 of 21 December 2010.
      2. Basel III: A Global Regulatory Framework for More Resilient Banks and Banking System December 2010 (Revised June 2011) issued under Saudi Central Bank  Circular# BCS 27885 of 12 November 2011.

      The attached is a recent BCBS document (July 2012)* entitled "Basel III Counterparty Credit Risk - Frequently Asked Questions", and represents an update to "Frequently Asked Questions" relating to Basel III counterparty credit risk of November 2011 which was circulated by Saudi Central Bank on 24 of November 2011. The above referred documents relate to Counterparty Credit risk rules under the Definition of Capital component of Basel III reforms. Consequently, these Frequently Asked Questions should be read in conjunction with Saudi Central Bank Circulars# BCS 1278 and BCS 27885.

      * This document has been superseded and replaced by Basel III counterparty credit risk - Frequently asked questions (21 November 2012)

    • Frequently Asked Questions (FAQs) on Market Risk Capital Requirements

      This document is superseded by the BCBS.
      In January 2016, the Basel Committee on Banking Supervision published the standard "Minimum Capital Requirements for Market Risk". The new standard sets out revised minimum capital requirements for Market Risk and replaces the existing minimum capital requirements for market risk in the global regulatory framework applicable in Saudi Arabia from 1 January 2019. 
       
      Since publication, the Committee has received a number of questions on the published standards text and has agreed to periodically review Frequently Asked Questions (FAQs) and publish answers along with any technical elaboration of the standards text and interpretative guidance that may be necessary to promote consistent global implementation of the standard. This document sets out the first set of responses to questions that have been received. 
       
      The Banks should access the BCBS document from BIS website www.bis.org.  

    • Frequently Asked Questions ​on Basel III Leverage Ratio- BCBS

      In January 2014, the Basel Committee on Banking Supervision published the Basel III leverage ratio framework* and disclosure requirements together with the public disclosure requirements applicable as of 1 January 2015. To promote consistent global implementation of those requirements, the Committee has agreed to periodically review frequently asked questions (FAQs) and publish answers along with any technical elaboration of the standards text and interpretative guidance that may be necessary.

      This document sets out the third set of FAQs that relate to the Basel III leverage ratio framework. The questions and answers, combined with those published earlier in the first and second sets of FAQs, are grouped according to the following themes:

      (i) on-balance sheet exposures;

      (ii) derivative exposures;

      (iii) specific treatment for written credit derivatives;

      (iv) securities financing transaction (SFT) exposures;

      (v) cross-product netting agreements for derivative exposures and SFTs;

      (vi) treatment of long settlement transactions and failed trades;

      (vii) off-balance sheet items; and

      (viii) scope of consolidation and disclosure.

      *The Leverage Ratio Framework, issued by SAMA circular No. (44047144), dated 04/06/1444 H, Corresponding To 27/12/2022 G, supersedes the Basel III Leverage Ratio Framework issued via SAMA circular No. (351000133367), dated 25 August 2014.

    • Frequently Asked Questions Concerning SAMA's Various Guidance Document Regarding Basel III

      1.Basel Committee on Banking Supervision (BCBS) Document regarding Liquidity Coverage Ratio Disclosure Standards
       
      We refer to SAMA's circular # 351000133366 dated 25 August 2014 with regard to the Prudential Return Guidance document concerning the captioned BCBS document of 25 August 2014. 
       
      The Agency response to the issues banks have raised is described in the attached. (Annex 1) 
       
      2.SAMA detailed guidance document relating to Pillar 1, June 2006 - A Haircut to Collateral issued through circular #290 dated 12 June 2006
       
      We refer to paragraph 6.6 "Other Items Related to CRM Techniques" of the captioned SAMA's guidance document with regard to haircut on collaterals where "KSA government bonds and bonds of public sector entities (PSE's) eligible for sovereign treatment in local currency had been set by SAMA at 0% haircut". 
       
      SAMA wishes to amend the above in order to bring supervisory haircut into line with BCBS requirement of para 151 as given in the Annex 2. 
       
      3.SAMA Circular # 361000005773 dated 4 November 2014 regarding National Discretions concerning SAMA's Implementation of Capital Reforms under Basel III Framework
       
      We refer to the captioned circular where SAMA has provided its National Discretion concerning the implementation of Basel III. In this regard with reference to para 99 of BCBS document as given below should read as "Yes" and not as originally submitted as "No". (Refer to Annex# 3)
       
      ParaAreas of national discretionKSA
      99Apply para 104 instead of 98 non-IMM CVA chargeYes
       
      4.SAMA’s Final document concerning Basel III IRB Approaches for Credit Risk issued through circular# 351000121270 dated 17 July 2014
       
      The Agency with regard to its captioned guidance document wishes to amend para 106 to read .... "that Netting is permitted in KSA for capital purposes" and not as previously documented as "Netting is not permitted in KSA". (Annex 4) 
       
      5.What is meant by PON "Press release 1 (a) Apply Statutory approach" in the last row of the Annexes (refer to Annex 5)
       
      Response 
       
      The captioned "PON" is an abbreviation of "Point of Non-viability" in the context of the BCBS press release of 13 January 2011 entitled "Basel Committee issue final elements of the reforms to raise the quality of regulatory capital". 
       
      This Press Release covers minimum requirements to ensure loss absorbency at the point of non-viability as described in Annex 4 where 1a refer to applying the statutory approach. 
       

    • FAQs on the Net Stable Funding Ratio (NSFR)

                Referring to the Net Stable Funding Ratio (NSFR) standard issued by the Basel Committee on Banking Supervision in October 2014, which has been implemented in the Kingdom of Saudi Arabia since January 2016. The aim of its implementation is to enhance liquidity risk management in banks by maintaining more stable funding sources to align asset maturity both on and off the balance sheet.

              Due to many inquiries regarding this standard, the Basel Committee on Banking Supervision has decided to conduct periodic reviews of frequently asked questions (FAQs) and publish them along with their answers, as well as any technical details or clarifications to enhance consistency at the international level in the application of this standard. The Basel Committee published FAQs on the Net Stable Funding Ratio (NSFR) on February 24, 2017. Therefore, SAMA emphasizes the importance of reviewing them on the Bank for International Settlements website.