The Saudi Central Bank (Sama) has announced issuance of the rules for practicing debt crowdfunding activities, which aim to regulate provisions for licensing this type of company and to regulate its conduct of activities.
This is in accordance with the powers granted to the Saudi Central Bank, under the provisions of the Finance Companies Control Law, reported SPA.
The new rules comes as part of Sama's efforts to support the opportunities for growth and economic development in Saudi Arabia, in order to achieve the goals of the Kingdom's Vision 2030 by supporting and organizing modern financing activities.
Including the activity of debt crowdfunding, and in line with the role of the central bank in promoting financial stability, said the report.
The Central Bank aims to attract a new segment of investors and companies in addition to owners of small and medium capitals, to work under its supervision, in a manner that ensures the efficiency of these companies by adhering to the requirements of information security, corporate governance, internal regulation, attribution, risk and compliance management, and internal auditing.
The new rules, in addition to encouraging innovation in financing products, contributes to providing modern financing products that can meet the needs of the beneficiaries.
Sama said that as per the new rules, the minimum paid-up capital for companies to practice debt crowdfunding activity has been set at SR5 million ($1.33 million), with Sama given authorisation to raise or reduce the minimum capital as per market conditions.
The Central Bank has invited global investors to engage in debt crowdfunding activity to familiarize themselves with financing regulations and their implementing regulations rules for practicing debt crowdfunding activity.