Element 7: Interaction of National Regimes in Cross-Border Transactions
Effective from 2020-10-05 - Oct 04 2020
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| Regulatory regimes would interact so as to result in sufficiently consistent and non- duplicative regulatory margin requirements for non-centrally cleared derivatives across jurisdictions. | ||
| 46. | These margin requirements are applicable to legal entities established in Saudi Arabia, which includes locally established subsidiaries of foreign entities, in relation to the initial and variation margins that they collect. SAMA may permit a bank to comply with the margin requirements of a host-country margin regime with respect to its derivatives activities, provided that SAMA considers the host-country margin regime to be consistent with the margin requirements described in this framework. | |
| 47. | For subsidiaries of Saudi banks in host jurisdictions, they should follow the requirements of the host country. | |
| 48. | A branch is part of the same legal entity as the headquarters; it may be subject to either the margin requirements of the jurisdiction where the headquarters is established or the requirements of the host country. Foreign Bank Branches (FBB) operating in the Saudi Arabia should be deemed compliant with these requirements if: | |
| • | The FBB is required to comply with, and has complied with, the margin requirements of that foreign jurisdiction (home regulator) that have been implemented through Published laws, rules or regulations; and | |
| • | The FBB has documentary evidence that the margin requirements of the foreign jurisdiction (home regulator) are comparable to SAMA’s or BCBS-IOSCO’s margin requirements for non-central cleared derivatives. | |