Rules of Saudi Arabian Riyal Interbank Express Indirect Participation

Indirect Participant 5. Subject to SAMA’s approval, a bank may opt to apply to register itself as Indirect Participant. 6. A Bank can be a Participant or an Indirect Participant therefore cannot hold both participation statuses at one time. 7. Upon receiving information as per Article 19 of these Rules , SAMA will assess overall risk before approving Tiered Participation Participant arrangement. 8. SAMA may define and impose risk exposure thresholds on case-by-case basis, which Indirect Participant has to monitor on a period basis. 9. Indirect Participant must notify SAMA its expectation on a bi-annual basis to when it is likely to breach thresholds as and if communicated by SAMA. 10. Indirect Participant must provide an updated information as required by Article 22 of these Rules whenever there is a significant change to risk exposures. 11. An existing Participant may apply to de-register itself to be Participant and register itself to Indirect Participant subject to SAMA’s approval. 12. An Indirect Participant may appoint only one Settlement Agent in Saudi Arabian Riyal Interbank Express and shall notify the identity of the Settlement Agent to SAMA in writing at least three (3) months before such service come into effect in Saudi Arabian Riyal Interbank Express. 2.3 Settlement Agent 13. Only National Banks having Participant status can be Settlement Agents. 14. Participants must follow SAMA New Banking Products and Services Regulation before offering Saudi Arabian Riyal Interbank Express Clearing Service to Banks. 15. SAMA may define and impose risk exposure thresholds on case-by-case basis, which Settlement Agent has to monitor on a periodic basis. 16. Settlement Agents must notify SAMA its expectation at least on an annual basis to when it is likely to breach thresholds. 17. Participants, through its own current account with SAMA (as Indirect Participant will not maintain current account with SAMA) must be able to clear all types of SAR transactions on the behalf of their indirect participants without any encumbrance. 18. Participants must have ability and capacity to execute SAMA’s monetary operations (Overnight Repurchase Agreement (Repo), Overnight Reverse Repurchase Agreement (Reverse Repo), USD sales etc.) and SAMA’s open market operations (SAMA Bills and term Repo etc.) on the behalf of their indirect participants without any encumbrance. 3. Indirect Participant Registration 3.1 Application Letter 19. A bank wish to register itself as Indirect Participant must send application letter to SAMA along with following documents: i) Appointment Letter from Chief Executive Officer (CEO) or equivalent of the Indirect Participant proposing the appointment of Settlement Agent; ii) A letter from the Bank to SAMA explaining to why it is in the Bank’s interest to operate as Indirect Participant; iii) Draft Service Level Agreement between Settlement Agent and the Bank wishing to register itself as Indirect Participant; and iv) Current Year plus 3 year SAR Payment Instructions Volumes and Values forecast (Incoming and Outgoing) of the Indirect Participant. 20. Based on review of the application letter and documents / information stated in article 19, SAMA will approve Bank’s registration as indirect participant to the Bank. SAMA may require additional information or may apply additional criteria on a case-by-case basis. 21. SAMA may reject the request if SAMA is of the view that Bank does not satisfy the Saudi Arabian Riyal Interbank Express Indirect Participation Rules. SAMA can also reject the request if it is of the view that it would be best interest of Financial Sector for the Bank to be Participant.