The Saudi Central Bank (SAMA) issued public consultation on rules for regulating the business of real estate refinance companies as part of its efforts to develop the financial sector and keep abreast with developments of the financing industry in general.
The Central Bank called on the public, interested parties, and specialists to review the draft rules and provide their views to enhance the principles of transparency and participation through the Istitlaa platform.
It noted that all views and observations would be under consideration ahead of the adoption of the final version of these rules.
The issuance of the rules also aims to support and enable real estate finance entities, which has led to the establishment of the Real Estate Refinance Company and the development of the real estate sector.
SAMA said the rules aim to ensure stability and growth of the real estate secondary market, provide better ways for real estate finance entities to finance the beneficiaries to own houses and play the role of mediator between the real estate finance sector and other sources of financing.
According to the new regulations, the Real Estate Refinance Company will carry out trading the rights of real estate financing contracts and facilitating the flow of funds to real estate financiers.
The Company may not grant real estate financing by guaranteeing the rights of real estate financing contracts before making arrangements to ensure the transfer of those rights, giving real estate financing to the beneficiaries directly, or acquiring real estate assets before obtaining a no-objection from the Central Bank.
The regulation indicated that the Real Estate Refinance Company must obtain a no-objection from the Central Bank before circulating the programs and products of the rights of real estate contracts in the secondary market.
The rules said the human resources must be localized by 50 percent when the Company begins its activities, at the level of departments and administrative groups. The instructions stressed that the appointment of non-Saudis in the Real Estate Refinance Company should be limited to jobs that require expertise not available in the Saudi labor market.
