Consolidated Accounts for Managing Debt Financing Value in Crowdfunding Entities
| No: 42075986 | Date(g): 9/6/2021 | Date(h): 29/10/1442 | Status: In-Force |
Translated Document
Based on the powers granted to SAMA under its Law issued by Royal Decree No. (M/36) dated 11/4/1442H, and the Monitoring of Financing Companies Law issued by Royal Decree No. (M/51) dated 13/8/1433H.
SAMA would like to emphasize to all debt crowdfunding institutions on the importance of adhering to the Monitoring of Financing Companies Law, its Implementing regulations, and the Rules for Conducting Debt Crowdfunding Activities regarding consolidated accounts for managing debt financing value in crowdfunding institutions. In particular, the following must be observed:
| First: | Emphasizing that the purpose of opening consolidated accounts in debt crowdfunding institutions must be limited solely for managing financing value and should be kept separate from the crowdfunding institution’s funds in independent accounts. |
| Second: | The account for participant funds in debt crowdfunding institutions should be named "Financing Value Management Account – Name of the Debt Crowdfunding Institution". |
| Third: | The debt crowdfunding institution must notify SAMA when opening or closing consolidated accounts with banks operating in the Kingdom. |
| Fourth: | The debt crowdfunding institution must establish written policies and controls related to the management and transaction of consolidated accounts, including defining the powers and authorized personnel, while ensuring the following: |
| 1) | Implement multi-layered control based on risk assessments, including activating internal oversight functions. |
| 2) | Authorized individuals managing the consolidated account should have their powers limited according to the authority matrix approved by the board of directors. The authorized person for the account must submit a report to senior management on a bi-monthly basis. |
| 3) | The consolidated account should not be linked to any financial liabilities or rights of the debt crowdfunding institution. |
| Fifth: | The debt crowdfunding institution must perform and document reconciliations to verify that the total value of executed debt crowdfunding transactions matches the consolidated account balance at the bank. |
| Sixth: | The agreement for opening the consolidated account with the bank must reflect all regulatory requirements as stated in the Rules for Conducting Debt Crowdfunding Activities, outlining the responsibilities of both the bank and the debt crowdfunding institution regarding transactions on the consolidated account. |
Please review and act upon these guidelines from this date. SAMA must be provided with the procedures undertaken to review and amend all documents in accordance with the instructions above.