Arab Press

بالشعب و للشعب
Friday, Aug 08, 2025

Legal framework to protect Saudi Arabia’s financial sector

Legal framework to protect Saudi Arabia’s financial sector

Saudi Arabia approved a legal framework for the establishment of systemically important financial institutions (SIFIs) in the Kingdom.
The system deals with all details governing the operations of such financial institutions in the country within the legal framework set by the Saudi Central Bank (SAMA) and the Capital Market Authority (CMA).

The new regulations clearly define the jurisdictions of SAMA and CMA to ensure seamless operation and supervision of the financial sector of Saudi Arabia.
SIFI can be a bank, insurance firm, or other financial institution whose failure could cause significant disruption to the overall financial system and the economy.

SAMA conducted a study of the regulatory framework for the treatment of SIFIs, to analyze the best practices and relevant international standards, and find the regulatory framework that matches the local environment and national economy.

Considering the importance of SIFIs to the economy, SAMA and CMA seek to ensure the protection of the financial sector in the Kingdom, stability of the economy, and continuity of SIFI operations by taking steps to reduce risks to the minimum.

The new regulations allow the competent authorities to maintain the soundness of the financial sector and protect the deposits and assets of customers as well as of insurance policyholders. The framework also ensures the continuity of the necessary business activities of financial institutions and reduces dependence on government support.

SAMA seeks to set special standards for the institutions under its supervision according to the related laws that take into account the size, complicated nature, and risks of institutions.

The most important aspect the competent authorities take into consideration before allowing any SIFI to start operations in the Kingdom is its recovery plan.

A financial institution must submit a recovery plan, in case of any untoward situation, within 180 days of its request for a license to operate in the Kingdom.

The plan should include detailed steps it would take to restore its financial position in the event of a crisis.

In case this financial institution is a holding company, it must also prepare a recovery plan for the financial group and a recovery plan for each financial institution affiliated with it.

Moreover, the recovery plan should include the following:

• A summary of its main elements and the ability of the financial institution to restore its position.

• A summary of the fundamental changes that have occurred in the financial institution since the last recovery plan submitted to the competent authority.

• A plan for communication and disclosure to deal with any negative reaction expected from the markets as a result of fundamental changes that negatively affect the financial institution, steps to restore capital and liquidity requirements, and to maintain and restore the financial position of the institution.

• An estimate of the expected time frame for the implementation of each of the basic aspects of the plan.

• A detailed description of any potential risks that may hinder its implementation and also determine the necessary activities provided by the financial institution.

In our next article, we will elaborate on other aspects of the new system necessary for the establishment and functioning of SIFIs in the Kingdom.

• Dimah Talal Alsharif is a Saudi legal consultant, head of the health law department at the law firm of Majed Garoub and a member of the International Association of Lawyers. Twitter: @dimah_alsharif
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Qatar Airways Clears Backlog of Passengers Following Missile Threats
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
×