The Saudi Arabian Monetary Authority (SAMA) published the key principles for governance in financial institutions under the control and supervision of the Saudi Central Bank. The principles aim to set the minimum requirements that would enhance the effective management of financial institutions, direct their financial and non-financial resources toward achieving their strategic objectives, maintain their stability, and preserve the rights of stakeholders.
Subject to the mandatory provisions stipulated in relevant laws and regulations, these principles shall apply as guiding rules to credit information companies, payment and financial technology companies, money exchange companies and institutions, consumer microfinance companies, finance support companies, financial lease contract registration companies, and debt-based crowdfunding companies. The central bank may, at any time, enforce all or some of the provisions of these principles on a mandatory basis. The principles cover the following aspects:
- Qualifications of board members
- Formation, appointment, and board affairs
- Responsibilities of the board
- Responsibilities of executive management
- Committees formed by the board
- Rights of shareholders
- Disclosure and transparency
SAMA has issued several regulations on governance; these principles should be read alongside these regulations, which include principles of conduct and business ethics in financial institutions; principles of compliance for commercial banks operating in the Kingdom of Saudi Arabia; requirements for appointment to leadership positions in financial institutions that are under the supervision of the Central Bank; Shariah-compliant governance framework for local banks; and Sharia-compliant governance instructions for finance companies.
Related Link: Key Principles (PDF)
Keywords: Middle East and Africa, South Africa, Banking, Governance, ESG, Key Principles, Guidance, SAMA
Previous ArticleOCC Issues Booklet on Management of Modeling Risks by Banks
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)