Article 2 of the Saudi Finance Companies Control Law
المادة 2 من نظام مراقبة شركات التمويل
The article defines the scope of the Law: it applies to finance companies licensed under its provisions.
Official text (Arabic)
This article has not been amended since the law was issued.
يسري هذا النظام على شركات التمويل التي يرخص لها وفقاً لأحكامه.
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 2 explained in plain English
This article shows to whom the Law applies: it applies to finance companies licensed under its provisions.
Referring back to Article 1, a "finance company" is a joint-stock company that has obtained a license to carry on finance activity, and a "license" is the permit the Saudi Arabian Monetary Agency (SAMA) issues to a company to carry on this activity. This means that the provisions in the Law that regulate the work of companies, their boards of directors and their finance limits are directed mainly to these licensed companies.
It is useful for the reader to know that:
- A customer dealing with a licensed finance company is dealing with a body subject to this Law.
- Article 3, which follows this article, speaks of licensed companies and how they carry on finance business, and is a direct application of this scope.
If you have a question about whether a particular body is subject to this Law, you can consult a lawyer who specializes in banking and finance.
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 2 of the Saudi Finance Companies Control Law
To whom does the Finance Companies Control Law apply?
The Law applies to finance companies licensed under its provisions.
What is meant by a finance company in this Law?
It is a joint-stock company that has obtained a license to carry on finance activity, according to Article 1.
More articles on Definitions and Scope of the Finance Law
- Article 1
The article defines the key terms in the Finance Companies Control Law, such as finance company, beneficiary, consumer, license and finance.
يقصد بالألفاظ والعبارات الآتية - أينما وردت في هذا النظام - المعاني المبينة أمام كل منها، ما لم يقتضِ السياق خلاف ذلك: النظام : نظام مراقبة شركات التمويل. اللائ
- Article 3
The article requires licensed finance companies to carry on finance in a way that does not conflict with Islamic Sharia, according to Sharia committees they choose, and without undermining the soundness of the financial system and fairness of dealings.
تزاول الشركات - المرخص لها بموجب هذا النظام - أعمال التمويل بما لا يتعارض مع أحكام الشريعة الإسلامية، بناءً على ما تقرره لجان شرعية تختار أعضاءها تلك الشركات، و
- Article 36
The article gives companies and entities that carried on finance in the Kingdom before the Law took effect a two-year period to regularize their status in line with its provisions.
تمنح الشركات والمؤسسات العاملة التي تزاول نشاط التمويل في المملكة قبل سريان هذا النظام مهلة سنتين لتسوية أوضاعها وفق أحكام هذا النظام.
- Article 37
The article makes the Zakat and Income Authority the body that issues the criteria needed to calculate the zakat base of finance companies.
تصدر مصلحة الزكاة والدخل المعايير اللازمة لاحتساب الوعاء الزكوي لشركات التمويل.
- Article 38
The article provides that the Finance Companies Control Law repeals any provisions that conflict with it.
يلغي هذا النظام كل ما يتعارض معه من أحكام.
- Article 39
The article requires the Governor to issue the Implementing Regulations within ninety days of the date the Law is issued, to be applied after the Law takes effect.
يصدر المحافظ اللائحة خلال تسعين يوماً من تاريخ صدور النظام، ويعمل بها بعد نفاذه.
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.