Subject: "Qualification Requirements for Appointment to Senior Positions in Banks Operating in Saudi Arabia".
In pursuance of SAMA's powers to supervise banks operating in Saudi Arabia in accordance with its Charter issued by Royal Decree No. 23 dated 23/5/1377 and the Banking Control Law promulgated by Royal Decree No. M/5 dated 22/2/1386 H;
And with reference to Article 3 of the Banking Control Law stipulating the licensing requirements to be met by a national bank, including that the founders and members of the Board of Directors shall have a sound reputation, and Article 12 of the Law specifying the conditions by which a person is prohibited to be appointed as a Director of the Board or a Manager in any bank, and Article 22 of the Law concerning the suspension or removal of any director or officer of the bank;
And with reference to paragraph 2 of the Rules for enforcing the provisions of the Banking Control Law issued by the Minister of Finance�s Decision No. 3/2149 dated 14/10/1406 concerning the enforcement of the provisions of Article 12 of the Banking Control Law, and paragraph 5 of the said Rules related to the application of Article 22 of the Law;
SAMA has added other requirements for appointment to senior positions in banks operating in the Kingdom as follows:
1. Directors
a. A bank must provide required information on each member of its Board of Directors, including the Chairman, as per the attached Forms Nos. (1) and (2). Also, a brief curriculum vitae of each Director should be attached.
b. A bank must provide required information on each person to the membership of the Board of Directors for next session as per the attached Forms Nos. (1) and (2). A brief Curriculum vitae of each Director should also be attached. These forms should be submitted to SAMA 15 days prior to the date of the General Assembly.
c. After nominating Directors of the Board, they shall select the Chairman of the Board and the Chairman of the Audit Committee. SAMA shall be notified in writing within 15 days after the date of this selection.
d. A bank should notify SAMA in writing within 15 days after the selection / appointment of a person as a new Director of a bank or of any of its subsidiaries. The information as per the attached Forms Nos. (1) and (2) should be submitted to SAMA, in addition to a brief curriculum vitae of the new Director.
e. SAMA should be notified in writing within 15 days of the dates of any resignations, discharge or removal of any Director. All relevant information, along with the reasons thereof must be provided.
2. General Managers and Managing Directors.
A General Manager or a Managing Director means a person who under the authority of the Board of Directors of the bank is granted the power to exercise responsibilities of the Chief Executive Officer. The banks shall be subject to the following requirements:
a. A bank must provide required information on its Managing Director / or General Manager as per the Forms Nos. (1) and (2) attached to this Circular. Also, a brief curriculum vitae of him should be submitted. A bank should also in the future obtain SAMA's prior approval for the appointment of a General Manager or Managing Director, and it should provide SAMA with information on appointees as per Forms Nos. (1) and (2) attached herein, in addition to a curriculum vitae of each of them. This information should be provided 15 days before such appointment.
b. SAMA should be notified in writing within 15 days of the date of any resignation, termination, removal, for any reason, of a General Manager or a Managing Director along with all information and reasons for such action.
3. Major Department Heads and Senior Managers
This category includes top tier managers who head key functions and departments of a bank such as the Treasurer, the Chief Credit Officer, the Chief Operations Officer, Head of Corporate, Retail, Private and Investment Banking, the Chief Financial Officer, the Chief Internal Auditor, as well as senior officials such as the Legal Counsel and the Compliance Officer.
For appointment to any of the indicated positions, a bank should notify SAMA in writing 15 days prior to the date of such appointment, submitting the information on the appointees as per the Forms Nos. (1) and (3) attached to this circular along with their brief curriculum vitae. This should be submitted in writing 15 days before the date of such appointments.
4. Overseas Branches, Subsidiaries and Representative Offices
Saudi Banks are required to provide the information described above for Directors, General Managers and Senior Managers of their overseas branches, subsidiaries and representative offices as per the Form Nos. (1) and (3) attached to this circular along with a brief curriculum vitae of the appointees to these positions.
5. Annual Information on Senior Positions in
Banks Operating in the Kingdom.
A bank should provide SAMA, within 60 days after the end of its financial year, with the following information:
a. List of all Members of the Board of Directors, including names, dates of appointment, positions held on any bank committees, and other important information on their work at the bank � to be filled in the attached Form (4).
b. List of all General Managers and Managing Directors, and Senior Managers of the bank, including names, current positions, dates of appointment to current positions, number of years of employment with the bank and other important information on their work at the bank, to be filled in the attached Form (4).
c. List of all Directors, General Managers, Managing Directors, and Senior Managers of its key departments and for overseas Branches, Subsidiaries and Representative Offices, including names, current positions, dates of appointment, number of years of employment with the bank, and other important information on their work at the bank, to be submitted on the attached Form (5).
6. Foreign Banks' Branches Operating in the Kingdom.
These branches are required to provide information on their Regional Managers and Senior Officers, to be filled in the attached Forms (1) and (3), along with brief curriculum vitae for each of them. A foreign bank should also seek SAMA's prior approval for the appointment of General Managers and Senior Officers of its branches operating in the Kingdom, and it should provide SAMA with information on them as per the Forms Nos. (1) and (3) attached herein along with brief curriculum vitae for each of them, 15 days prior to such appointments.
When making appointments to the above positions, a bank should indicate in its employment agreements that such appointments are subject to SAMA's prior approval.
The information required under item #5 above is to be provided to SAMA � Banking Supervision Department - for the year ending 31st December 2005 by 31st January 2006 and thereafter annually. The effective date of this Circular is 1st April 2005 (22/2/1426 H).
You are kindly requested to comply with the provisions of this Circular and advise all your branches and representative offices to act accordingly.
Forms 1 to 5 Form (1) Form (2) Form (3) Form (4) Form (5) All Forms (1 to)