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Financial Memorandum

Financial Memorandum Template for Saudi Arabia

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Key Requirements PROMPT example:

Financial Memorandum

"I need a Financial Memorandum to document a Shariah-compliant financing arrangement between our Saudi-based manufacturing company and Islamic Bank ABC, with a facility value of 50 million SAR to be drawn down by March 2025."

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Document background
A Financial Memorandum is extensively used in Saudi Arabian financial transactions to document and formalize financial arrangements between parties. This document type is particularly important in the Saudi Arabian context as it must incorporate both conventional financial principles and Islamic finance requirements. The memorandum typically details financial terms, payment structures, and compliance obligations while ensuring adherence to SAMA regulations and Shariah principles. It serves as a crucial document for establishing clear financial relationships, managing risks, and maintaining regulatory compliance in Saudi Arabia's unique financial landscape. The Financial Memorandum is commonly used for various purposes including banking arrangements, investment structures, and corporate financial dealings, always maintaining alignment with Saudi Arabian banking laws and Islamic finance principles.
Suggested Sections

1. Parties: Identification of all parties to the memorandum, including their legal status and regulatory authorizations

2. Background: Context of the financial arrangement and relationship between the parties

3. Definitions: Key terms used throughout the memorandum, including financial and technical terms

4. Purpose and Scope: Clear statement of the financial arrangement's purpose and scope of activities covered

5. Financial Terms: Details of the financial arrangement, including amounts, payment terms, and Shariah-compliant structures

6. Regulatory Compliance: Statements ensuring compliance with Saudi banking laws and SAMA regulations

7. Shariah Compliance: Specific provisions ensuring the arrangement complies with Islamic finance principles

8. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority

9. Confidentiality: Provisions regarding the treatment of confidential information

10. Term and Termination: Duration of the memorandum and circumstances for termination

11. Governing Law and Jurisdiction: Confirmation of Saudi Arabian law as governing law and jurisdiction

Optional Sections

1. Security Arrangements: Include when the financial arrangement requires specific security or collateral

2. Regulatory Reporting: Include when the arrangement requires specific reporting to SAMA or other authorities

3. Anti-Money Laundering Provisions: Detailed AML provisions when dealing with significant financial transactions

4. Force Majeure: Include when needed to address potential external disruptions to the arrangement

5. Assignment Rights: Include when transfer or assignment of rights needs to be specifically addressed

6. Dispute Resolution: Include when specific dispute resolution mechanisms beyond court jurisdiction are required

Suggested Schedules

1. Schedule 1 - Financial Terms Detail: Detailed breakdown of financial terms, calculations, and payment schedules

2. Schedule 2 - Compliance Requirements: Specific regulatory and Shariah compliance requirements and certifications

3. Schedule 3 - Required Documentation: List of required documents and certificates from each party

4. Schedule 4 - Authorized Signatories: List of authorized signatories and their signing authorities

5. Appendix A - Shariah Approval: Shariah board approvals and certifications if required

6. Appendix B - Regulatory Licenses: Copies of relevant regulatory licenses and permits

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Acceptance
Account
Affiliate
Agreement
Applicable Law
Authorized Person
Banking Day
Business Day
Capital Markets Authority
Confidential Information
Designated Account
Effective Date
Event of Default
Facility
Financial Indebtedness
Financial Statements
Force Majeure Event
Governmental Authority
Gregorian Calendar
Hijri Calendar
Islamic Banking Principles
Material Adverse Effect
Murabaha
Musharaka
Notice
Parties
Payment Date
Profit Rate
Regulatory Authority
Related Party
Relevant Authority
SAMA
Sanctions
Saudi Arabian Law
Security
Shariah Board
Shariah Compliance
Shariah Principles
Subsidiary
Sukuk
Tax
Term
Transaction Documents
Wakala
Zakat
Clauses
Parties and Capacity
Recitals
Definitions
Purpose
Financial Terms
Payment Obligations
Shariah Compliance
Regulatory Compliance
Representations and Warranties
Conditions Precedent
Security
Covenants
Information Undertakings
Financial Undertakings
Events of Default
Remedies
Anti-Money Laundering
Know Your Customer
Confidentiality
Data Protection
Force Majeure
Change of Circumstances
Assignment and Transfer
Notices
Amendments
Severability
Waiver
Set-Off
Currency Provisions
Tax and Zakat
Costs and Expenses
Term and Termination
Governing Law
Dispute Resolution
Entire Agreement
Relevant Industries

Banking

Financial Services

Islamic Finance

Investment Management

Corporate Finance

Government & Public Sector

Real Estate

Infrastructure

Energy

Manufacturing

Trading & Commerce

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Islamic Banking

Regulatory Affairs

Investment

Financial Control

Relevant Roles

Chief Financial Officer

Financial Director

Legal Counsel

Compliance Officer

Islamic Finance Specialist

Treasury Manager

Risk Manager

Corporate Banking Manager

Investment Manager

Financial Controller

Shariah Compliance Officer

Regulatory Affairs Manager

Banking Relationship Manager

Finance Manager

Corporate Finance Director

Industries
Banking Control Law: Royal Decree No. M/5 dated 22/2/1386H (1966) - Sets out the fundamental banking regulations and financial institution operations in Saudi Arabia
Commercial Courts Law: Royal Decree No. M/93 dated 15/8/1441H (2020) - Governs commercial transactions and dispute resolution in commercial matters
Anti-Money Laundering Law: Royal Decree No. M/20 dated 5/2/1439H (2017) - Provides regulations for preventing money laundering and ensuring financial transparency
SAMA Rules on Opening Banking Accounts: Central bank regulations governing the documentation and procedures for financial transactions and banking relationships
Capital Market Law: Royal Decree No. M/30 dated 2/6/1424H (2003) - Regulates financial markets and securities transactions
Electronic Transactions Law: Royal Decree No. M/18 dated 8/3/1428H (2007) - Governs electronic transactions and digital signatures in financial agreements
Shariah Principles: Islamic law principles that prohibit riba (interest), gharar (uncertainty), and require financial transactions to be Shariah-compliant
Corporate Law: Royal Decree No. M/3 dated 28/1/1437H (2015) - Governs corporate entities and their financial obligations and transactions
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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