3. Bank Calculation Methodology

Contributor banks are required to implement a process whereby the Head of Asset and Liability Management (ALM) or similar position in the bank (without any role in proprietary trading) takes the responsibility for submission of the SAIBOR/SAIBID rates on a daily basis to the benchmark administrator independently without any influence from the bank's Treasurer or the Deputy Treasurer. Banks are required to obtain SAMA's approval for individuals in these roles as per SAMA circulated requirements for Appointments to Senior Positions in Financial Institutions Supervised by the Saudi Central Bank using SAMA standard fit and proper application . 3.4 Contributor banks must develop and implement reasonable submission procedures based on the applicable SAIBOR/SAIBID methodologies. The overall submission procedures should at a minimum include the following: ■ Eligible transaction and other data inputs in calculating submissions ■ Record the level of the waterfall used to calculate the submission; ■ Procedures to detect and evaluate the bona-fide nature of such transactions and inputs; ■ Policies guiding and detailing the use of expert judgment, including documentation; ■ Maintaining reports, records and underlying documentation supporting submissions; ■ Procedures for pre-submission validation of eligible inputs and procedures for review by senior staff to check inputs before submission. 3.5 The submission procedures should be approved by the Board or Board delegated authority and should be consistently applied. Each contributor bank should ensure that its Internal Audit Department undertakes an annual review of the process and of the methodologies and report to the relevant contributor bank's Senior Management, Audit Committee and the Board on the compliance with the established policies and procedures. 1 For the avoidance of doubt, each contributor bank's submission procedures shall property document its SAIBOR and SAIBID submission procedures in respect of the SAIBOR and SAIBID contributions to the benchmark administrator as detailed further in paragraph 2.4 below, including (but not limited to) eligible transaction and other data inputs in calculating submissions for Level 1, 2, and 3 submissions and policies guiding and detailing its expert judgment approach. 2 Copies of each contributor bank's submission procedures should be provided to: (1) SAMA at the following email address: [email protected] ; and (2) the benchmark administrator at the following email address: [email protected] .