Saudi Arabia: New rules to help regulate money exchange business

Abu Dhabi: The Saudi Monetary Authority has issued new rules regulating the money exchange business in the kingdom, to combat money laundering and funding of terrorism and to help protect the rights of clients.

The regulation, which will come into effect after 30 days, allows hotels, hotel apartments, and tourist offices to exchange currencies from their customers provided that these currencies are sold to a licensed bank or exchange center, while adhering to the provisions of the anti-money laundering system and the UN Security Council resolutions related to the spread of weapons of mass destruction and its financing.

Money changers are limited to buying, selling and circulating foreign currencies, importing and exporting currencies, subject to obtaining a license from the Monetary Agency.

The regulations stressed that exchange shops should not carry out any activity that it was not authorised to practice, including any other commercial business that was not approved by the monetary authority, opening current accounts, investment accounts, savings accounts, or any other accounts for their clients or employees, issuing letters of guarantee or opening documentary credits or guarantees, leasing of safes, accepting deposits and speculating in currencies, metals and stocks.

The rules governing money changers emphasised adherence to the requirements of localisation of jobs, contracting with employment services companies regarding working hours, official holidays, appointment to leadership positions, and the provision of an administrative structure that includes all departments and jobs, in which the tasks of departments, duties and responsibilities of each individual are specified, and a compliance officer is appointed.

The exchange shop must set an appropriate framework to protect customers from the risks of fraud and loss of privacy, and to comply at all times with clear signboards for the public indicating the rights of the customer, and to provide clear channels to receive complaints and address them within seven days.

Responsibilities of exchanges:

- Commitment to anti-money laundering and terrorist financing instructions

Identify, document and address risks

Developing and implementing appropriate and appropriate policies capital:

Two million riyals of paid up capital.

7 million for the payment to the centers of import and export of cash.

10 million for centers authorized to transfer funds inside

Maintaining a cash reserve of not less than (5%) and not more than (10%)

License:

The term is 5 years, renewable.

Renewal six months before the license expires

Commitments:

- To carry out the activity in a suitable location

Not to use the word bank or bank

Identify suspicious and fraudulent transactions

- Adherence to the risk management policy

Record all operations in the automated system

Maintain confidentiality of information

Attribution to a third party:

A- The existence of an approved policy, which is periodically reviewed.

B- Ensure that there are no obstacles to accessing his data

C- He must be licensed to practice his commercial activity.

Import and export of currencies:

Customs notification at border crossings.

- Maintaining documents of import and export of currencies

- Preparing funds in an appropriate way to transfer them.

Compliance with all instructions from the Monetary Agency

Customer Protection:

Receipts of transactions

- Currency rates are in a clear place

Solve their complaints within a week.

Preventing disclosure of their secrets

Periodic data:

- The location of the head office, branches, and coordinates

Holders of leadership positions and their job titles

A list of employee data and names.

Suspension or restriction of services.

Temporarily suspend the license.

When will the exchange permit be canceled?

- If it does not meet the requirements of the regulations

- If one of the license conditions is lost

- If its information is found to be incorrect

- If the center harms its clients or the public interest.

If the inspection team is prevented from performing its task.

- If it refuses to provide Saudi Monetary Authority with the documents