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    SAMA Publishes Open Banking Framework and Other Regtech Updates

    November 02, 2022

    The Saudi Arabian Monetary Agency (SAMA) published the open banking framework, granted permits to four fintech firms to operate under its Regulatory Sandbox, and granted licenses to three payment financial technology companies specializing in e-commerce payments and e-wallet services. Additionally, SAMA is seeking comments, until November 06, 2022, on the draft amendments to the Finance Companies Control Law.

    The key highlights of the aforementioned updates follow:

    • SAMA set out the open banking framework, as part of one of the key outputs of the Open Banking Program, which includes a comprehensive set of legislation, regulatory guidelines, and technical standards based on international best practices to enable banks and fintech companies to provide open banking services in the Kingdom. SAMA clarified that the open banking services focus on the Account Information Service (AIS) and Payment Initiation Service (PIS). SAMA notified that it is tracking the development of banks and fintech companies to ensure their readiness to launch open banking services within the first quarter of 2023. The Open Banking Program is one of the initiatives of the Fintech Strategy, which is a pillars of the Financial Sector Development Program (FSDP) under Saudi Vision 2030.
    • As part of other technology-related developments, SAMA granted permits to "Wally Global Arabia, Sanam Aliliddikhar, Istishraf Al-Bayanat, and Spare Arabian Financial Company" to operate under its Regulatory Sandbox, bringing the total number of permitted fintech companies to 42. SAMA clarified that this batch of permitted companies will develop and launch new and innovative open banking solutions in accordance with international best regulatory and technical practices. SAMA also granted licenses to three new financial technology companies namely, “Smart Digital Payment company (Tiqmo), Arab Sea Financial Company and Fatoraah” specialized in E-commerce payments and E-wallet services. This brings the total number of payment companies licensed by SAMA to 22, in addition to 5 companies were granted an “In-principle Approval.”
    • The draft amendments to the Finance Companies Control Law aim to support the stability of the finance sector while contributing to the achievements of the Kingdom Vision 2030 objectives. The draft amendments provide Saudi Central Bank power to exclude the requirements where finance companies intend to carry out the financing business through the form of a joint stock company. The amendments also include granting SAMA the discretion to exempt companies from the prohibition to engage in another activity other than financing as well as the limitation related to a member of the board of directors who simultaneously works in another finance companies boards but of different activity. The amendments also address new provision enabling the Saudi Central Bank to waive requirements, as needed, related to the financial emerging technologies.

     

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    Keywords: Middle East and Africa, Saudi Arabia, Banking, Fintech, Regtech, Open Banking, Regulatory Sandbox, Licensing, Fintech Strategy, Governance, SAMA

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