Article 79 of the Saudi Implementing Regulations of the Bankruptcy Law
المادة 79 من اللائحة التنفيذية لنظام الإفلاس · الفصل الثاني عشر: ترتيبات الضمانات والمقاصة المرتبطة بالمعاملات المالية
The Saudi Central Bank and the Capital Market Authority, in agreement with the Ministry, specify the contracts and transactions covered by the arrangement of guarantees and set-off linked to financial transactions, and the provisions of the Law they are excluded from.
Official text (Arabic)
This article has not been amended since the law was issued.
تحدد مؤسسة النقد العربي السعودي وهيئة السوق المالية بالاتفاق مع الوزارة -بموجب حكم المادة (الرابعة عشرة بعد المائتين) من النظام- العقود والصفقات محل ترتيب الضمانات والمقاصة المرتبطة بالمعاملات المالية وأحكام النظام التي تستثنى منها.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 79 explained in plain English
This article of the Regulations deals with the arrangement of guarantees and set-off linked to financial transactions, based on the provision of Article 214 of the Bankruptcy Law. It does not lay down detailed rules but specifies who sets them.
The bodies competent to specify:
- The Saudi Central Bank.
- The Capital Market Authority.
- This is done in agreement with the Ministry.
What these bodies specify:
- The contracts and transactions that are the subject of the arrangement of guarantees and set-off linked to financial transactions.
- The provisions of the Law they are excluded from, that is, which these contracts and transactions are excluded from.
In practice this means that some financial contracts and transactions may not be subject to some provisions of the Bankruptcy Law, but the specification of those contracts and provisions is not in this article but in what the mentioned bodies specify. It cannot be concluded from this article alone that a particular contract is excluded.
The article comes after the chapter on priority of debts, whose provisions end with Article 78 on the order of paying dues before ending some procedures, and before Article 80 on objecting before the court of appeal.
Anyone who works in financial transactions and needs to know what applies to his contracts is best advised to consult a lawyer who specializes in banking, finance and securities.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 79 of the Saudi Implementing Regulations of the Bankruptcy Law
Who specifies the contracts that are the subject of the arrangement of guarantees and set-off linked to financial transactions?
The Saudi Central Bank and the Capital Market Authority, in agreement with the Ministry, under Article 214 of the Law.
Are some financial contracts excluded from the provisions of the Bankruptcy Law?
The article refers to provisions of the Law from which these contracts and transactions are excluded, and specifying them is left to the mentioned bodies.
Does the article name the excluded contracts?
No. The article only specifies the bodies that carry out the specification.
More articles on Set-Off and Priority of Debts
- Article 54
This article specifies what the decision to distribute to creditors in liquidation must contain, and allows the trustee to ask the court to amend it.
1 - يجب أن يتضمن قرار التوزيع على الدائنين الآتي: أ - بيان أصول التفليسة المبيعة وحصيلة بيعها. ب - بيان طريقة توزيع حصيلة بيع أصول التفليسة وتاريخ التوزيع. ج -
- Article 71
If selling the bankruptcy estate's assets yields proceeds sufficient for the expenses of liquidation or small debtors' liquidation, they are distributed starting with the Bankruptcy Committee's fees and expenses, then to the creditors.
إذا نتجت عن بيع أصول التفليسة حصيلة تكفي للوفاء بمصروفات إجراء التصفية أو التصفية لصغار المدينين، فيكون توزيعها وفقاً للترتيب الآتي: أ - أتعاب ومصروفات لجنة الإ
- Article 73
Automatic set-off based on a debt assignment that arose after the application to open any of the liquidation procedures was submitted is not permitted.
لا يجوز إجراء المقاصة التلقائية بناء على حوالة دين نشأت بعد تقديم طلب افتتاح أي من إجراءات التصفية.
- Article 74
This article makes the competent authority responsible for issuing the rules on multilateral set-off between regulated entities that carry on a financial activity.
تصدر الجهة المختصة القواعد المنظمة لإجراء عمليات المقاصة المتعددة الأطراف بين الكيانات المنظمة التي تمارس نشاطاً ماليًّا.
- Article 75
Automatic set-off takes place according to the exchange rates at the Saudi Central Bank on the date the procedure opens.
تجرى المقاصة التلقائية وفقاً لأسعار الصرف لدى مؤسسة النقد العربي السعودي في تاريخ افتتاح الإجراء.
- Article 76
This article makes the order of debts within each priority listed in Article 196 of the Bankruptcy Law follow their order in the relevant laws.
يكون ترتيب أولوية الديون في كل من الأولويات الواردة في المادة (السادسة والتسعين بعد المائة) من النظام وفق ترتيبها في الأنظمة ذات العلاقة.
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.