Media Centre

Saudi's SAMA mandates advance notification of investment rounds by financing companies

MAKKAH - The Saudi Central Bank (SAMA) has mandated that all financing companies operating within the Kingdom provide notification to the Central Bank at least five working days prior to undertaking any investment round.

These entities include financing companies, payment service providers, exchange bureaus, and entities supporting financing activities licensed by the Central Bank.

The SAMA further stipulated that entities intending to conduct investment rounds must disclose all pertinent information, including the investment round’s timeline, purpose, value, and target audience, as well as a statement outlining its impact on the ownership structure and financial position of the non-bank financial institution.

Moreover, entities must provide details regarding the type and structure of the investment instrument such as equity, convertible instruments, or debt instruments, along with any other relevant supporting documentation and any documents specifically requested by the Central Bank.

SAMA also underscored the importance of complying with the obligations imposed on non-bank financial institutions under the applicable regulations and instructions, including obtaining the Central Bank’s prior approval wherever it is required.

It is noteworthy that investment rounds are stages in which a company raises capital from investors in exchange for equity, convertible securities, debt instruments, or other forms of financing.