| 7. | OTC derivative transactions that fall within the scope of “reportable transactions” described in paragraph 8 to 12 below are required to be reported to the SAMA authorised Trade Repository Operator.
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| 8. | Reportable transactions are derivative transactions that meet the following criteria:
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| | a. | The transaction is traded over the counter cleared or non-cleared (i.e. exchange traded transactions are excluded) or is novated from an OTC transaction to a central counterparty (CCP);
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| | b. | The transactions are an interest rate derivative, a foreign exchange (FX) derivative, an equity derivative, a credit derivative and a commodity derivative supported by the SAMA authorised Trade Repository;
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| | c. | The transaction is conducted by a counterparty which is a licensed bank in Kingdom of Saudi Arabia (KSA) (in the case of a locally incorporated bank) or a KSA branch (in the case of a foreign bank) or by its financial subsidiaries or branches (including SPVs).
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| | d. | The other counterparty to the transaction is:
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| | | i. | A licensed bank in KSA (in the case of a locally incorporated bank) or a KSA branch (in the case of a foreign bank);
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| | | ii. | A foreign financial counterparty;
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| | | iii. | A KSA or a foreign non-financial counterparty; or
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| | | iv. | A CCP if the transaction is novated from an OTC transaction to a CCP.
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| 9. | If a reportable transaction is, for example, entered into between a KSA branch bank X and the USA Head Office of bank Y, Bank X falls within paragraph 8(c) while Bank Y falls within paragraph 8(d). The transaction is reportable by Bank X but not by Bank Y. If however the transaction is booked in KSA branch of bank Y, reporting obligation rules must be applied to determine the reporting counterparty as per the single sided reporting obligation approach as mentioned in APPENDIX C.
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| 10. | The transactions referred to in paragraph 8(c) above include those that are booked in KSA office/branch of a licensed bank as a result of transfer of booking (i.e. through novation) of contracts entered into with external parties by the head office or overseas branches of the bank. If such novated transactions are reportable (i.e. the criteria set out in paragraph 8 above are also met after novation), the reporting bank should report the external counterparty (another licensed bank) who has originally entered into contract with the bank, instead of the office/branch from which the contract is transferred, as its counterparty to the transaction.
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| 11. | Reportable transactions do not include interbranch transactions (except those that fall within paragraph 9 above) and interbranch transactions (e.g. transactions between different desks of the treasury function). An interbranch transaction refers to a principal-to-principal transaction (or a back-to-back transaction) conducted between different branches of the same bank, including any transaction undertaken to transfer the risk of the transaction (or portfolio transactions) from one branch to another.
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| 12. | For the avoidance of doubt, reportable transactions:
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| | A. | Exclude “spot” FX transactions, which refer in this context to FX transactions that are settled via an actual delivery of the relevant currencies within two business days;
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| | B. | Exclude, from the perspective of a reporting bank, those transactions booked in its local or overseas subsidiaries (unless those subsidiaries are licensed banks and reporting criteria set out in these requirements are met, where in such case, they need to report to KSA TR regardless of their location);
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| | C. | Include, in the case of reportable transactions which are novated for central clearing, those new transactions entered into by reporting banks with CCPs ; and
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| | D. | Exclude, transactions in which any of the following institutions participate as counterparty:
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| | | i. | The Government of the Kingdom of Saudi Arabia (those risk weighted at zero under the capital adequacy rules).
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| | | ii. | SAMA
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| | | iii. | The Saudi Stock Exchange
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| | | iv. | The Saudi Depository Center
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| | | v. | A Supranational Authority
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| | | vi. | Multilateral Development Banks
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