المادة 7: Instructions for Opening Investment Accounts for Legal Persons

Article 7: Instructions for Opening Investment Accounts for Legal Persons

a) Opening Investment Accounts for Saudi Companies and Companies from GCC Member States

1) To open an investment account for a Saudi company, the company must be incorporated in accordance with the Companies Law, and to open an investment account for a company from a GCC member state, the company must fall within the scope of the definition of a GCC legal person.

2) Unless the company is listed on the Exchange, the capital market institution must verify that the company has what provides that it is permitted to invest in the fields it is intending to invest in.

3) To open an investment account for a Saudi or GCC company, the capital market institution may use the guidance list of documents provided in Annex (1) of these Instructions by obtaining information of such documents and verifying them.

4) When opening an investment account for a listed company on the Exchange (excluding banks, finance companies and capital market institutions insurance companies) or an affiliate of the listed company included in its consolidated financial statements, the capital market institution must comply with the following additional conditions: -The listed company's investment in securities listed on the Exchange shall be based on a Board of Directors' resolution of the listed company and the company that the investment account is to be opened for (if it is an affiliate of that company). Such resolution shall also determine the investment controls, and prior to opening the investment account, the capital market institution must obtain and verify information of the resolution. -Unless the investment of the listed company, or that of its affiliate, is for one year (in which period the company commits not to sell the security before the elapsing of one year from the time of last purchase of the security issued by the same issuer), the investment in securities must be through an investment fund or investment portfolio managed by an capital market institution based on a management contract, which clearly states that there is a complete segregation between the listed company, its affiliates, and the investment decisions, and that the terms of contract do not conflict with such requirement. The capital market institution must ensure that the terms of contract are in accordance with these controls prior to signing the management contract with the listed company or its affiliate. ماع - Public -The capital market institution must notify the Authority without delay of any management contract signed with any listed company or its affiliate and refer to the number of the investment account opened for such purpose and the number of the investment portfolio linked to it.

b) Opening Investment Accounts for Foreign Legal Persons The capital market institution may open an investment account for a foreign legal for the purpose of investing in the permitted securities in accordance with the Capital Market Law and its Implementing Regulations and the relevant instructions issued by the Authority.

c) Opening Investment Accounts for Funds Owned by a Governmental Entity

1) A capital market institution may open an investment account for a fund of a governmental entity, provided that the fund is fully owned by a Saudi governmental entity or a governmental entity of a GCC member state.

2) The capital market institution, when opening an investment account for the fund referred to in paragraph (1) above, must obtain and verify information of the following documents: -The fund's bylaws. -The issued resolution assigning the authorised signatories to open and operate the investment account of the fund and their valid identity documents. -The fund's articles of association (if any) and its annexes, which clearly show the structure of the fund's capital and its management. -Documents that show the names of members of the Board of Directors.

d) Opening Investment Accounts for Non-profit Organisations in the Kingdom: When opening an investment account for a Non-profit Organisation in the Kingdom, the capital market institution must obtain and verify information of the following documents: -The license issued by the competent authority. -What provides that it is permitted for the organization to invest in the fields it is intending to invest in. -The Board of Directors' resolution approving the opening of the investment account and assigning the authorised signatories to operate the investment account.

e) Opening Investment Accounts for Endowments or for Establishments Owned by Endowments

1) When opening an investment account for an endowment in the Kingdom, the capital market institution must obtain and verify information of the following documents: -Approval and endowment registration certificate issued by the General Authority of Endowments. -National identification card of the endowment's trustee / board of trustees. ماع - Public -National identification card of the authorised signatories to operate the investment account and the delegation resolution (if there is a delegation of the power to operate such account).

2) When opening an investment account for an establishment owned by an endowment in the Kingdom, the capital market institution must obtain and verify information of the commercial register of the establishment, and information of the documents provided in subparagraph (1) of paragraph (e) of this Article for the endowment which owns the establishment. investment account

f) Opening Investment Accounts for Governmental Entities To open an investment account for a governmental entity (Saudi or from another GCC member state), the capital market institution must obtain and verify information of the following documents: -The main documents of the governmental entity according to its administrative regulations and relevant laws. -The resolution of the competent person in the governmental entity to assign the authorised signatories that will open and operate the investment account, and the Identification Documents of such signatories. -The approval of the Ministry of Finance issued for the Saudi governmental entity to open the investment account, unless there are legal provisions issued by the competent authority that explicitly give the right to such governmental entity to invest in securities.

g) Opening Investment Accounts for International Organisations and Institutions: To open an investment account for international organisations and institutions that have premises in the Kingdom, the capital market institution must obtain and verify information of the following documents: -The Association Agreement and/or bylaws. -The premises agreement signed with the government of the Kingdom that permits the international organisation or institution to invest in securities. -The resolution of the competent person in accordance with the Association Agreement and/or bylaws assigning the authorised signatories to open and operate the investment account.

h) Opening Investment Accounts for Investment Funds Established in the Kingdom or in a GCC member state: To open an investment account for an investment fund established in the Kingdom or in a GCC member state, the capital market institution may use the guidance list of documents provided in Annex (2) of these Instructions by obtaining information of such documents and verifying them.