Require financial institutions to have treatment plans that include market value, marketing and sale

The Important Financial Institutions Treatment System approved a series of controls and procedures to protect the financial system, deposits and assets of clients, and to provide treatment plans within 180 days, including mechanisms for determining market value, marketing and selling. The system aims to enhance effective supervision and control of important financial institutions in order to ensure the preservation of monetary and financial stability, and to protect the financial system from any negative influences. According to the official gazette, the financial facility is classified as important by a decision issued by the competent authority – the Saudi Central Bank or the Financial Market Authority. Each with regard to the financial institutions whose activities he supervises – according to standards they set for the enterprises under its supervision, provided that these criteria take into account the size of the financial institution, its complexity resulting from its internal and external interference and interconnection with other financial institutions, its mode of operation, and the risks associated with it. And subject to the provisions of the system financial institutions, holding companies, subsidiary establishments, foreign branches, and financial groups, and the competent authority may take remedial measures against any important financial institution, its owners, and its creditors. This is in order to protect the financial system and the financial sector in the Kingdom, to avoid any serious negative effects on their stability, to limit their spread on them and to continue the necessary activities of the important financial institution in question. It also aims to reduce dependence on government support, protect deposits, clients’ assets and funds, rights related to insurance policies, protect settlement systems, and maintain their stability.

According to the system, the important financial institution must prepare a recovery plan within 180 days, and the competent authority within 90 days of submitting the plan must approve or return it to the financial institution for modification and then re-submit it within a period that it specifies for it. The competent authority must prepare a treatment plan for each important financial institution that includes Processing procedures and must take into account all the possibilities of disturbance and its causes, whether related to the important financial institution, or that may affect it. The treatment plan should also include identifying the main competent authority – in cases that require this – and any other related party whose cooperation requires, the tasks and powers of each party, a summary of the main elements of the plan, and an explanation of how the necessary activities, or any other major activity, are systematically and economically separated from Other activities; To ensure the survival of the important financial facility. The plan should also include a detailed description of the procedures for determining the market value of each of the important financial institution’s activities, operations, and assets, the extent of their marketability and sale, a description of the options available for the continued membership of the important financial institution in the settlement systems, and an evaluation of options for transferring clients ’assets, deposits, funds, accounts and insurance policies. .

The competent authority shall submit the treatment plan or update it – after reviewing it in light of the financial institution’s views – to the Council of Economic and Development Affairs. For approval, the board issues its decision within 60 days.

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