The Saudi Central Bank (SAMA) has issued a new directive requiring all licensed financing companies in the Kingdom to provide at least five working days’ notice before initiating any investment round. The move signals increased regulatory oversight for the country’s fast-growing non-bank financial institution sector.
Quick Facts
- New mandate from the Saudi Central Bank.
- Requires 5-day advance notice for investment rounds.
- Affects all licensed non-bank financial institutions.
Detailing the Directive: What Companies Must Disclose
Under the new rules, entities planning to raise capital must submit a comprehensive brief to SAMA. This includes the investment round’s timeline, its primary purpose, total value, and the target investor profile.
Furthermore, companies are required to detail the type and structure of the investment instrument, whether it be equity, convertible notes, or debt instruments. They must also provide a clear statement outlining the potential impact of the round on the company’s ownership structure and overall financial standing. SAMA may also request additional supporting documentation on a case-by-case basis.
A Broader Push for Financial Transparency
This mandate applies to a wide range of entities licensed by the central bank, including financing companies, payment service providers, exchange bureaus, and other organizations that support financing activities.
SAMA emphasized that this notification process is part of a broader obligation for non-bank financial institutions to comply with existing regulations. The directive aims to ensure the central bank maintains clear visibility over capital-raising activities in the sector, particularly in instances where its prior approval is already a requirement. This step aligns with efforts to build a more transparent and stable financial ecosystem in the Kingdom.
About The Saudi Central Bank (SAMA)
The Saudi Central Bank (SAMA) is the central bank of the Kingdom of Saudi Arabia. Its functions include issuing the national currency, supervising commercial banks and other financial institutions, managing the country’s foreign exchange reserves, and maintaining the stability of the financial system.
Source: Zawya
