FAQs for Implementing Regulations

The establishment of a single unit or department for the assessment and management of risks and for internal auditing does not meet the requirements of paragraph (a) of Article (74) of the Corporate Governance Regulations, which states: "the Company shall establish units or departments for the assessment and management of risks and for internal auditing".

Remuneration and Nomination Committees may be combined into one committee, Otherwise, committees stipulated in the Corporate Governance Regulations may not be merged together with any of the other committees mentioned in the Regulations into one committee.

Yes, taking into consideration the provisions of reliance on third parties to conduct customer due diligence procedures as per the Anti-Money Laundering and Counter-Terrorist Financing Rules.

In accordance with CMA Board's resolution issued on (23/11/2017), paragraph (b) of Article (38) of Authorised Persons Regulations does not require that the terms of business agreement with the clients be signed between the authorized person and the investor as a legal person or the qualified foreign investor directly. The agreement may be indirect, provided that the terms of business define the basis for conducting securities business with the client or for his account. For example: a qualified foreign investor may delegate a third party to sign the terms of business agreement with the authorized person, or the authorized person may sign a master agreement with a third party covering the terms of business to the qualified foreign investor introduced by that party.

The requirements for opening investment accounts are not applied retroactively to existing investment accounts prior to the effective date of the Investment Accounts Instructions, taking into account that authorized persons must comply with all those requirements at the time of updating the information of those investment accounts, in accordance with article 14 of the Instructions referenced.

The period starts for each client individually, whereas the period for updating the client's information shall not exceed three years from the date of opening the investment account or the date of the last update of the client's account information.

Murabaha short term transactions fall under the definition of Money Market Transactions, as they are considered short term trade finance contracts.

A sophisticated investor is any person with master's degree in finance, accounting or any other specialization related to the field of securities. Also, A sophisticated investor is any person who passes level one of the qualification tests to obtain the certificate of "Chartered Financial Analyst" (CFA), or any person who holds one of the following certificates:  Saudi Organization for Certified Public Accountants (SOCPA)   Certified Public Accountant (CPA)  Certified Management Accountant (CMA

It is means the increase or decrease in the operational results that is equal toor greater than 10% according to the previous year's results or any expectations announced by the company. The company may include in the report any other differences in the operational results in the Board's report if they are less than 10% of the previous year's results.

In accordance with CMA Board's resolution issued on (23/11/2017), this paragraph shall not apply to government entities.

As per the CMA Board resolution issued in this regard, the Authorised Person (AP) when opening an investment account for a QFI is not required to obtain copies of the identification of the QFI's owners, managers, authorized signatories and persons authorized to manage the account, without prejudice to the AP's obligation to identify and verify their identity using reliable, independent source documents, data or information in accordance with the related laws, regulations and instructions. This includes cases in which the AP rely on a third party for opening an investment account for a QFI, without prejudice to the AP's obligation to take adequate steps to ensure that copies of identification documents and other relevant documentation relating to the CDD requirements will be made available from the third party promptly upon request in accordance with the related laws, regulations and instructions.

The Authority shall take no action in the event that the request to convene an Assembly includes an item to delegate the referred authorisation power of the Ordinary General Assembly, provided that such procedure is in accordance with the following conditions: 1) The duration of the authorisation shall be for a maximum of one year from the date of the General Assembly's approval to the delegation, or until the end of the current term of the Board of Directors of the Company, whichever is earlier. 2) The delegation shall not include the power to authorise the consultancy businesses and contracts which are provided to the company by a member of the board – pursuant to a professional license - in accordance with Article (3) of the Regulatory Rules and Procedures issued pursuant to the Companies Law relating to Listed Joint Stock Companies. 3) The delegation shall not exempt the company from disclosing related parties transactions in the relevant laws, regulations and instructions. 4) Members of the board of directors shall be prohibited from voting on the items of delegation and revoking the delegation in the General Assembly. Without prejudice to the shareholder's right to recourse to the company and its board of directors if he/she considers that such delegation is being used in matters not in the interest of the company. Additionally, a number of shareholders whom their ownership represent 5% of the company's capital, have the right to add an item related to delegation revocation in the agenda of the Assembly meeting when preparing it, or submit a request to the board of directors to convene the Ordinary General Assembly to vote on the revocation of such delegation.