Chapter 2: Licensing Provisions
Article 5
This article has been amended in accordance with the Royal Decree No. (M/272) dated 04/12/1445H, corresponding to 10/06/2024G. Please refer to the Arabic version of this article to read the last updated version.First: The founders of a finance company or their representatives shall apply to SAMA for a license in accordance with the following conditions:
1. Submission of the organizational structure of the company, operation systems and an investment plan demonstrating its technical capability to engage in finance activities in accordance with the Regulations;
2. The capital of the company shall not be less than the amount specified by SAMA, and not less than the amount specified under the Companies Law. The foreign share in the capital, if any, shall not exceed the percentage specified by SAMA;
3. Each founding member of the company shall be legally competent and shall not:
a. be in default of any obligation against his creditors;
b. be in breach of the provisions of the Capital Market Law and its Regulations, the Banking Control Law, the Cooperative Insurance Companies Control Law or finance laws;
c. have been declared bankrupt;
d. be convicted of any crime impinging on integrity, unless rehabilitated pursuant to laws or as specified under the Regulations.
4. The persons nominated to perform monitoring and executive duties in the company shall satisfy professional competence requirements, in addition to the following:
a. possess theoretical and practical knowledge in finance;
b. not be in breach of the provisions of the Capital Market Law and its Regulations, or convicted of violating the Banking Control Law, the Cooperative Insurance Companies Control Law or finance laws;
c. have not been convicted of a crime impinging on integrity, unless rehabilitated pursuant to laws or as specified under the Regulations.
5. Satisfy any other condition stipulated by the Regulations for issuing the license.
Second: SAMA shall, upon completion of the application, issue its decision of approval or reasoned rejection within a period not exceeding 60 days. In making its decision, it shall observe the competitiveness and integrity of the industry and quality of services.
Third: Upon approval, applications shall be referred to the Ministry of Commerce and Industry to complete company incorporation and registration in accordance with the provisions of the Companies Law.
Fourth: Upon completion of the incorporation of the company and issuance of the commercial registration, SAMA shall issue the license permitting the company to practice. The license term shall be five years.
Fifth: The Regulations shall specify the fees for issuing, renewing and amending the license.
Article 6
The finance company must commence its finance activities within a period not exceeding one year as from the date of obtaining the license. After commencing its activities, it shall not cease its activities for more than three successive months unless approved by SAMA. The Regulations shall specify necessary controls therefor.
Article 7
SAMA may revoke the license if it finds that the finance company has provided false information to SAMA, or failed to disclose material information that should have been provided for licensing purposes as set forth in the Regulations.
Article 8
The shares of founding shareholders may not be disposed of except with the approval of SAMA. Recipients of such shares shall satisfy the requirements and terms set out in Article 5(First) (3) of this Law.
Article 9
The license shall be deemed expired upon appointment of a liquidator for the finance company or issuance of a bankruptcy ruling.
Soft Launch
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SAMA Regulatory Rulebook is a platform that aims to assist the regulated entities to access SAMA regulatory content adeptly and efficiently.
SAMA Regulatory Rulebook is still on its development and soft launch stage. SAMA is not liable for its contents and does not warrant or represent that (the Services related to the platform, information or material presented in the platform) is displayed free of any inaccuracies, omissions, or errors (“Faults”). SAMA accepts no liability for any loss, claim or damage resulting from any use of the platform, and any decisions made, or actions taken based on the information contained in or generated by the platform.
SAMA Regulatory Rulebook has no legal effect and it does not aim to amend or revoke any legal provisions. The Rulebook still Contains some documents under review, including translated versions. Therefore, SAMA Regulatory content circulated through SAMA official channels remains in force.
Without prejudice to the terms of use of SAMA website Hereby, you acknowledge that any illegal, unauthorized use and/or any breach of any of these provisions may result in legal actions against you.
Your access and use of SAMA Regulatory Rulebook and its content is considered as an acceptance and approval of commitment by you without any limitation or condition to the following:
SAMA Regulatory Rulebook is a platform that aims to assist the regulated entities to access SAMA regulatory content adeptly and efficiently.
SAMA Regulatory Rulebook is still on its development and soft launch stage. SAMA is not liable for its contents and does not warrant or represent that (the Services related to the platform, information or material presented in the platform) is displayed free of any inaccuracies, omissions, or errors (“Faults”). SAMA accepts no liability for any loss, claim or damage resulting from any use of the platform, and any decisions made, or actions taken based on the information contained in or generated by the platform.
SAMA Regulatory Rulebook has no legal effect and it does not aim to amend or revoke any legal provisions. The Rulebook still Contains some documents under review, including translated versions. Therefore, SAMA Regulatory content circulated through SAMA official channels remains in force.
Without prejudice to the terms of use of SAMA website Hereby, you acknowledge that any illegal, unauthorized use and/or any breach of any of these provisions may result in legal actions against you.