2.4. Senior Management Function (SMF) and Responsibilities

Effective from Sep 24 2019 - Dec 31 2019
To view other versions open the versions tab on the right

15.	SAMA requires all FBBs to have at least one individual approved as a bespoke Senior Management Function (SMF) known as the General Manager (GM)/Chief Executive Officer (CEO) or any other title as appropriate. The GM/CEO should have the highest degree of individual decision-making authority within the FBB over activities and areas subject to KSA regulations.
16.	SAMA looks to the GM/CEO to oversee the management of the branch, including matters of a corporate governance nature that relate to the branch. As such, SAMA requires that the GM/CEO will be accountable for the FBB’s operations.
17.	While the GM/CEO may not conduct all responsibilities or activities directly, SAMA requires the GM/CEO to retain his or her overall accountability for the operations of the FBB. Regardless of who conducts the various functions, SAMA requires the GM/CEO to:
	i.	Ensure that business objectives, strategies, and plans set for the FBB are prudent in the context of the FBB. Recognizing that FBBs are an extension of the parent, the GM/CEO is required to advise the parent should any planned activities for the FBB not be considered suitable;
	ii.	Be satisfied that appropriate policies and procedures (i.e. control systems) are in place to manage the risks regardless of where the controls may reside;
	iii.	Receive sufficiently comprehensive and frequent reports to understand and monitor the business of the FBB; and
	iv.	Undertake or obtain, periodically, an independent assessment of the adequacy and effectiveness of the controls. Independent assessment may be obtained from individuals or groups designated with that role, such as internal audit or risk management (either at the branch or Head Office), or qualified third parties.
18.	The GM/CEO is required to ensure that there are robust policies and procedures to manage the assets and liabilities recorded on the FBB’s books and records and related accounts (e.g. deposit, loan, investment, etc.).
19.	The GM/CEO should ensure the FBB is in compliance with all applicable legislation and regulations, and is conducting its business and affairs in a manner that is consistent with applicable SAMA requirements.
20.	While the GM/CEO may delegate responsibility for day-to-day management to others, SAMA requires the GM/CEO to be in a position to verify the FBB’s regulatory returns. Therefore, SAMA would expect the GM/CEO to have, or to ensure the individuals undertaking activities with respect to the FBB have, a good understanding of applicable legislation, regulations and guidelines, as well as the activities and related records of the branch, including its assets, liabilities, revenues and expenses. SAMA would also expect the GM/CEO to be satisfied with any work performed by others (e.g., Head Office or another entity within the group) and should ensure any deficiencies are corrected.

Soft Launch