Oil Kingdom gets strict with money: KSA rolls out new financial rules
On 2 July 2012 the Saudi Council of Ministers issued a package of five new laws which many believe will dramatically change the finance market in the Kingdom.
These new laws have been anticipated for some time and are as follows:
1) The Execution/Enforcement Law
2) The Finance Lease Law
3) The Real Estate Mortgage Law
4) The Real Estate Finance Law
5) The Law on Supervision of Finance Companies.
Currently, copies of these laws are not yet published; however, The Minister of Finance has announced that they will take effect 90 days after the Royal Decree which was issued on 1 July 2012, although the earlier drafts of these laws indicated that they were to come into effect after 90 days from the date of publication in the Official Gazette.
The Minister of Finance has also announced that the implementing regulations of the Finance Laws (which is likely to refer to the Finance Lease Law, the Real Estate Finance Law and the Law on Supervision of Finance Companies) are to be drafted by the Saudi Arabian Monetary Agency (the KSA Central Bank).
Hesham Al Homoud, the Head of Al Tamimi’s Corporate and Commercial Department in Riyadhsaid, said, "The introduction of these new Laws has been keenly awaited for some time. A draft of the Real Estate Mortgage previously sighted by us, provided for the introduction of a system under which mortgages over Saudi land could be registered in favour of financiers and the registered mortgagee would have priority rights against third parties." He further added: "We also expect the other Laws included in the package to have a very significant impact upon the Finance Industry in KSA, both in terms of regulation and the way in which banks and other finance providers conduct business in KSA."