Tag: #Technology
CMA: Regulatory Framework for Equity Crowdfunding Approved #Saudi_Arabia
Overview
The Capital Market Authority (“CMA”) Board issued its resolution approving amendments of the following:
It is worth noting that these amendments shall be effective as of the date of their publication on September 27, 2022.
Who is involved in these amendments?
These amendments are applicable to:
- Capital Market Institutions
- Companies that hold Financial Technology Experimental Permit
Main Differences
The amendments include regulating share offerings through capital market institutions that are authorized to carry out arranging activities in the course of carrying out securities crowdfunding.
Also, the amendments comprised setting the requirements for custody of clients’ money received by capital market institutions that are authorized to carry out arranging activities in the course of carrying out securities crowdfunding, and opening and operating investment accounts.
This comes after the CMA has published the draft Regulatory Framework for Equity Crowdfunding and the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Center, for public consultation for a period of (45) calendar days.
What's New About CMA FinTech Lab?
In order to understand and assess the impact of new technologies in the KSA’s capital market, as well as to help transform the Saudi market into an intelligent financial center, CMA has designed the FinTech Lab which welcomes local as well as international firms wishing to test new digital solutions in a ‘live’ environment with a view to deploying them in the KSA in the future.
This actually means..
This amendment will allow applicants to apply to the FinTech Lab when they are ready and in addition bring their chosen business model/concept to test in an intelligent regulatory environment.
The updated framework will also support the objectives of the FinTech strategy by making the Kingdom one of the world’s leading countries in the field, and it will contribute to the economic empowerment of the Saudi society and its citizens by promoting further innovations in technology-based capital market.
Conclusions
It is expected that the amendments shall reflect on enabling the Capital Market Institutions that are authorized to carry out arranging activities to offer of securities via Equity Crowdfunding platforms, as well as the custody of the clients’ money in the course of carrying out securities crowdfunding.
Feel free to share your thoughts and inquiries with us on this update or the capital market via email or a meeting.
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Saudi Central Bank Updates Its Regulatory Sandbox Framework
Saudi Central Bank Updates Its Regulatory Sandbox Framework #Saudi_Arabia
Overview
The Saudi Central Bank (SAMA) announced that it has updated the Framework of its Regulatory Sandbox. The step was taken as part of SAMA’s efforts to achieve several national strategic goals through the promotion of the Regulatory Sandbox’s involvement in the Financial Sector Development Program (FSDP), a key objective of the Saudi Vision 2030, which is aiming to develop the kingdom’s economy, diversify its sources of income, enable financial institutions to support the growth of the private sector, and allow new companies to provide their own array of financial services.
What is Regulatory Sandbox?
SAMA launched the Regulatory Sandbox initiative back in 2018 to garner the participation of local, regional and international FinTech institutions and companies seeking to take advantage of current and new technologies to provide innovative financial products and services to Saudi markets.
SAMA’s Sandbox directly connects with the Saudi Vision 2030 which endeavors to reinforce economic growth and investment activities. Vision 2030 has been further developed into 12 Executive Programs, which includes the ‘Financial Sector Development Program’ (FSDP). The FSDP program seeks to develop the financial industry as a diversified and effective financial services sector to support the development of the national economy by stimulating savings, finance and investment by, inter alia, enabling financial institutions to support private sector growth.
To this end, SAMA’s Regulatory Sandbox aims to attract local and International FinTech businesses that are looking to leverage existing or new technology in an innovative way to deliver new financial products or services to KSA markets, or improve business processes. The target audience includes, but is not limited to, KSA and international Start-ups, FinTechs, established financial sector firms, and professional services companies partnering with or providing support to such businesses.
Why is Regulatory Sandbox so important?
In order to understand and assess the impact of new technologies in the KSA’s FS market, as well as to help transforming the Saudi market into a smart financial center, SAMA has designed a Regulatory Sandbox which welcomes local as well as international firms wishing to test new digital solutions in a ‘live’ environment with a view to deploy them in the KSA in the future.
What's New About SAMA Regulatory Sandbox?
The Central Bank pointed out that the updated framework of the Regulatory Sandbox is open for both local and international applicants to apply be they entrepreneurs, non-regulated companies or existing regulated entities, the key differentiator of the updated framework is to move from a cohort based approach to an Always Open approach which will give greater flexibility to those applying.
Get Ready, Apply, & Launch!
This transition will allow applicants to apply to the Regulatory Sandbox when they are ready and in addition bring their chosen business model/concept and not work to a specific one determined for the cohort.
The updated framework will also support the objectives of the FinTech strategy by making the Kingdom one of the world’s leading countries in the field, and it will contribute to the economic empowerment of the Saudi society and its citizens by promoting further innovations in technology-based financial services.
When Does the Regulatory Sandbox Framework start?
SAMA will allow FinTech companies to submit Regulatory Sandbox applications under the updated framework as of the 6th of September 2022.
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Upcoming Events
The Central Bank in cooperation with Fintech Saudi, will hold on this September 5, 2022, at 12:00 PM, an introductory workshop on the updated regulatory framework for the legislative experimental environment.
Fintech Saudi will be hosting a virtual workshop in which members of the Regulatory Sandbox team at SAMA will introduce the new framework to an open audience.
We invite you to attend the workshop where the following aspects will be covered:
1. Enhancements to the framework
2. Walk through the lifecycle from Application to Testing
3. Q&A with the Sandbox team.
Conclusions
We believe that this SAMA Regulatory Sandbox Framework update will leverage the Financial Technology sector in KSA where it will make financial sector firms and technology companies applying for SAMA license way easier and feasible comparing to status quo.
As #1 FinTech law firm, Knowledge Pioneers has been deeply involved in such updates in the legal environment of the Financial Technology sector.
If you are interested in the FinTech arena in the KSA, please fill out our FinTech Assessment Survey in order to have one of FinTech experts contact you promptly.
For further information, please do not hesitate to Contact Us.
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Idle Land Program Phase II Kick-off
Phase II of Idle Lands Program has been launched in 17 new cities by the Ministry of Housing
What is an Idle Land?
Idle lands are vacant or undeveloped plots designated for residential or commercial use and situated within the boundaries of a city as defined by the Saudi Shoura Council back in May 2013 within their regulation that enacted Idle Land Program that is applicable to all urban areas across the country.
What is Idle Land Program?
Idle Land Program charges an annual fee for non-governmental idle lands with sole or Joint ownership with a rate of 2.5% of the land’s actual market value. The Ministry of Housing will use the fee income on housing projects and infrastructure to supply housing solutions and products.
Idle Lands Program Objectives
- Increasing modern estate supply achieves the balance between supply and demand.
- Providing residential lots with affordable prices
- Guaranteeing fair competition
- Controlling monopoly practices
What is new about the Idle Lands Program?
In phase II, developed lands owned by one proprietor in an approved housing scheme exceeding 10,000 square meters in 17 additional cities, including 5 cities before the end of 2020 will also be liable to pay the fee.
The implementation of this program will start in five cities namely; Medina, Abha, Khamis Mushayt, Taif, and Jizan
- Medina
- Abha
- Khamis Mushayt
- Taif
- Jizan
As per studies conducted by the program team, this program will be applied to the rest of the cities during this year 2021, and that it will include an increase in the supply of developed lands.
ILP phase II aims at lands belonging to a single owner in an approved scheme, with a total area of more than 10 thousand square meters.
The total of the lands subject to fees in the cities of Jeddah, Riyadh, Dammam, and Makkah has reached 411 million square meters, and the total payment issued by the program since the beginning of its implementation has reached about 5,500 payment orders.
The total of the lands subject to fees in the cities of Jeddah, Riyadh, Dammam, and Makkah has reached 411 million square meters, and the total payment issued by the program since the beginning of its implementation has reached about 5,500 payment orders.
Conclusions
Compliance
As a result, landlords subject to Idle Lands Programs are highly recommended to commence developing their idle lands as soon as possible. Otherwise, they are faced with ever-stricter legal requirements and increasing costs of compliance to hold ownership of idle lands.
Appeals
Once fined, a landlord may appeal in writing to a committee formed by a decision of the Minister of Housing, within 60 days from the date he was notified of the fine decision.
Penalties and fines
He shall be punished with an additional fine not exceeding the amount of the fee owed on his land, and this shall not prejudice his obligation to pay the due fee.
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Nafith Platform Launch
Phase II of Idle Lands Program has been launched in 17 new cities by the Ministry of Housing
OVERVIEW
On Sunday, 8/26/1441H corresponding to 4/19/2020, Minister of Justice, Dr. Walid Al-Samaani, launched Nafith Platform that allows individuals and corporates to electronically create, save, and manage execution bonds in a safe and reliable environment.
Such inauguration took place with the participation of the ministers of commerce, housing, communications, and the governor of the Saudi Central Bank to ensure the most integration possible across Saudi concerned agencies.
The platform provides a digital bond service where the beneficiary/user can create, issue, and have bonds approved by counterpart users, follow up on their status, view their details around the clock, and have such bonds linked to and monitored by the Ministry of Justice and courts of execution to facilitate enforcement thereof.
Nafith Objectives
- a secure digital protective environment on the bond market
- preserves the rights of the parties
- ensures the integrity of instruments
- eliminates related violations and old obstacles
- ensures the completion of the bond requirements
- speeds up and eases down proceedings required for enforcing a bond by digitally linking with courts of enforcement
- preserves bonds from damage and loss
- reduces execution disputes, e.g. related to the allegation of forgery
- stimulating repayment through early notification to the debtor before transferring the bond to the court.
Nafith comes as a part of Vision 2030 and the MoJ’s efforts for engaging the private sector under the National Transformation Program as well as an increased shift towards digital services and platforms.