Aggregate Accounts to Manage the Finance Amount for Engaging in Debt-Based Crowdfunding
| No: 42075986 | Date(g): 9/6/2021 | Date(h): 29/10/1442 | Status: In-Force |
Effective from 2021-06-09 - Jun 08 2021
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Based on the powers granted to the Central Bank under its system issued by Royal Decree No. (M/36) dated 11/4/1442 H, and the Finance Companies Control System issued by Royal Decree No. (M/51) dated 13/8/1433 H,
The Central Bank would like to emphasize to all debt crowd funding institutions the importance of adhering to the Finance Companies Control System, its executive regulations, and the Debt Crowd funding Activity Rules regarding aggregated accounts for managing financing value in debt crowdfunding institutions. In particular, the following must be observed:
| First: | Aggregated accounts in debt crowd funding institutions must be solely for managing financing value and should be kept separate from the crowd funding institution’s funds in independent accounts. |
| Second: | The account for participant funds in debt crowd funding institutions should be named "Financing Value Management Account – [Name of the Debt Crowd funding Institution]". |
| Third: | The debt crowd funding institution must notify the Central Bank when opening or closing aggregated accounts with banks operating in the Kingdom. |
| Fourth: | The debt crowd funding institution must establish written policies and controls related to the management and operation of aggregated 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) | Management of the aggregated account should be limited to authorized personnel as per the board-approved authorization matrix, with authorized individuals required to submit bi-monthly reports to senior management. |
| 3) | The aggregated account should not be linked to any financial liabilities or rights of the debt crowd funding institution. |
| Fifth: | The debt crowd funding institution must perform and document reconciliations to verify that the total value of debt crowd funding transactions matches the aggregated account balance at the bank. |
| Sixth: | The agreement for opening the aggregated account with the bank must reflect all regulatory requirements as stated in the Debt Crowd funding Activity Rules, outlining the responsibilities of both the bank and the debt crowd funding institution regarding transactions on the aggregated account. |
Please review and act upon these guidelines from this date. The Central Bank should be provided with the procedures taken to review and amend all documents in accordance with the instructions above.