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The Importance of Adhering to Regulations Related to the Commercial Environment and Credit Transactions

No: 42016471 Date(g): 1/11/2020 | Date(h): 16/3/1442 Status: In-Force

Translated Document

Referring to the Registered Real Estate Mortgage Law issued by Royal Decree No. (M/49) dated 13/08/1433H, the Insolvency Law issued by Royal Decree No. (M/50) dated 28/05/1439H, the Law of Commercial Pledge issued by Royal Decree No. (M/86) dated 08/08/1439H, and the Movable Property Security Law issued by Royal Decree No. (M/94) dated 15/08/1441H and their implementing regulations.

Given the importance of these laws in preserving and stabilizing the commercial environment in the Kingdom, the link of many credit transactions to their provisions, the importance of compliance with these laws, and the aim of achieving financial stability and protecting transactions; SAMA would like to emphasize to all financing entities the following:

1.Inclusion of credit risk assessments for the risks associated with the initiation of bankruptcy procedures, and verification of the existence and adequacy of procedures and mechanisms in this regard.
2.Ensure that transactions related to mortgages and guarantees comply with the provisions of the laws mentioned above, and the provisions of other relevant laws.