Provide SAMA with Annual and Quarterly Financial Statements and Annual Reports on internal control systems
| No: 35217/41 | Date(g): 11/2/2019 | Date(h): 6/6/1440 | Status: In-Force |
Effective from 2019-02-11 - Feb 10 2019
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Based on the provision of paragraph (c) of Article 15 of the rules governing the practice of money exchange, issued by the decision of the Minister of Finance No. (1357) dated 1/5/1432 AH, which states: "The institution may issue any instructions it deems necessary to implement supervisory and regulatory requirements for money exchange activities," and based on Article 17 of the rules, which states: "Every money exchanger must maintain regular accounting records in which its operations are recorded promptly, in accordance with what is specified by the institution. They must follow the accounting standards set by the institution when preparing their financial statements, and they must provide the institution with the following financial data:
| a) | A copy of the audited annual balance sheet by a licensed external auditor within a maximum period of one month from the end of the fiscal year. | |
| b) | A financial statement every three months, starting from the beginning of the fiscal year, to be submitted within fifteen days of the end of the following quarter…"Additionally, Article 19 of the rules states: "The money exchanger must provide the institution with a copy of the audit report on its annual financial statements, which should include any observations regarding these statements and their compliance with the applicable regulations and standards. |
Based on the above, money exchange centers must adhere to the following:
| First: | Quarterly financial statements: | ||
| A- | The Central Bank emphasizes the importance of providing it with the financial position every three months, starting from the beginning of the fiscal year, within fifteen days of the subsequent quarter, in accordance with the provisions of paragraph (b) of Article (17) of the regulations governing the practice of exchange activities. | ||
| B- | Providing the Central Bank with the quarterly financial statements reviewed by a licensed external auditor in accordance with the accounting standards applicable in the Kingdom, within 30 days of the subsequent quarter. | ||
| Second: | Annual financial statements: | ||
| A- | The Central Bank emphasizes the importance of providing it with the audited annual financial statements by a licensed external auditor in accordance with the accounting standards applicable in the Kingdom, within a maximum period of one month from the end of the fiscal year, in accordance with the provisions of paragraph (a) of Article (17) of the regulations governing the practice of exchange activities. | ||
| B- | Providing the Central Bank with the audited annual financial statements by a licensed external auditor in accordance with the accounting standards applicable in the Kingdom, as stipulated in Article (19) of the regulations governing the practice of exchange activities, within a maximum period of two months from the end of the fiscal year. | ||
| Third: | The total duration of the appointment of the external auditor for the exchange center should not exceed five consecutive years. | ||
| Fourth: | Annually instructing the external auditor to assess the internal control systems in place at the exchange center, and providing the Central Bank with a copy of the report within a maximum period of two months from the end of the fiscal year. This report should be separate from the annual financial statements. | ||
| Fifth: | Sending the annual and quarterly financial statements and the internal control systems report along with a scanned electronic copy of the exchange center's letter to the email address (MEXCH@SAMA.GOV.SA), and a hard copy addressed to the Exchange Centers Supervision Division. | ||
To be reviewed and acted upon starting from the fiscal year 2019, with acknowledgment of receipt within one week from the date hereof. Please note that the Central Bank will take all necessary legal measures against exchange centers that violate the provisions of this circular.
In accordance with Circular No. (44017957) dated 03/03/1444 AH, exchange centers must adhere to the following:
- In accordance with paragraph (A/7) of Article (14) of the regulations, an independent periodic audit at least annually must be conducted to evaluate the operations of the exchange center, including its automated systems, and to assess the center's compliance with its internal policies and procedures. This audit should be completed by the end of July each calendar year at the latest.
- Compliance with the provisions of paragraph (C) of Article (31) of the regulations, which requires the external auditor to evaluate the internal control systems. The report should, at a minimum, include any observations regarding the center's adherence to the regulations governing the practice of exchange activities.