Definitions
| No: 42005223 | Date(g): 15/9/2020 | Date(h): 28/1/1442 | Status: In-Force |
Translated Document
Effective from 2020-09-15 - Sep 14 2020
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| The terms and phrases below—wherever they appear in these principles—mean the definitions given next to each term, unless the context indicates otherwise: | ||
| 1- | Central Bank: The Saudi Central Bank. | |
| 2- | Bank: Local commercial banks and branches of foreign banks licensed to conduct banking activities in the Kingdom in accordance with the Banking Control Law. | |
| 3- | Council: The Board of Directors of the local bank. The primary officer in a foreign bank branch assumes the tasks and responsibilities of the Board of Directors in local banks wherever referenced in these principles. | |
| 4- | Senior Management: The executive management of the local bank (CEO, Managing Director, General Manager) and senior executives responsible for managing the bank's operations, proposing and implementing strategic decisions, and the branch manager for foreign bank branches licensed to conduct banking activities in the Kingdom. | |
| 5- | Compliance Function: An independent function at the senior management level that identifies, evaluates, advises on, monitors, and reports on non-compliance risks related to the bank's exposure to regulatory, administrative penalties, financial losses, or harm to its reputation due to non-compliance with regulations, instructions, financial crime prevention requirements, or standards of conduct and professional practice. This function is carried out by an independent compliance unit in banks. | |
| 6- | Compliance Policy: The policy approved by the Board of Directors of the bank and the head of the foreign bank branch that defines and outlines the comprehensive responsibilities of compliance, the authority of the compliance unit, and the main principles, pillars, and methodology the bank follows to manage compliance risks, including the elements outlined in Principle (1). | |
| 7- | Compliance Unit: A unit at the group, sector, or department level, depending on the structure of first managerial level units in local banks, or a department, division, or section, etc., at the first managerial level reporting to the primary officer in foreign bank branches, where the head and compliance staff are solely responsible for compliance-related tasks and responsibilities. | |
| 8- | Chief Compliance Officer: The CEO of the compliance unit in local banks and the executive in the first managerial level reporting directly to the branch head in foreign bank branches, whose responsibilities include coordinating the process of identifying non-compliance risks, providing advice to senior management on how to manage them, and overseeing the activities of compliance officers and staff. | |
| 9- | Compliance Staff: All individuals performing compliance duties and responsibilities within the compliance unit. | |
| 10- | Compliance Officer: An employee from other operational units, different from the compliance unit staff, designated by the Chief Compliance Officer to handle specific compliance responsibilities and tasks within their operational unit. | |
| 11- | Compliance Risks: Risks resulting in or leading to the imposition of penalties and regulatory actions against the bank or significant financial losses, or damage to its reputation due to non-compliance with relevant regulations, instructions, and standards applicable to the bank, and ethical and behavioral codes governing banking activities, collectively referred to as "non-compliance risks." | |
| 12- | Compliance Role: The description of responsibilities assigned to compliance staff within the bank. | |
| 13- | Regulations: The regulations and rules applicable to the banking sector and its personnel. | |
| 14- | Instructions: All directives issued by SAMA in its role as a supervisory and regulatory authority, and by other relevant authorities, including regulations, rules, principles, frameworks, guides, and mandatory circulars. | |
| 15- | Compliance Systems, Rules, and Standards: The regulations and instructions applicable to the banking sector and its personnel. | |
| 16- | Conflict of Interest: A situation where the Chief Compliance Officer, compliance staff, or compliance officers in other units may have a direct or indirect interest or relationship in a matter being reviewed by them for decision-making purposes; such that this interest or relationship prevents or leads to the belief that it interferes with their ability to express their opinion or make a decision independently and impartially, without considering this interest or relationship. | |
* The name "Saudi Central Bank" replaced "Saudi Arabian Monetary Authority" according to the Saudi Central Bank Law No. (M/36) dated 11/04/1442H.