RIYADH: The Saudi Central Bank has updated its regulations governing debt crowdfunding activities, the bank said in a statement on Monday.
The new rules aim to redefine the beneficiary to include all commercial establishments registered in the Kingdom that seek to obtain financing through the debt crowdfunding platform.
New regulations also aim to add a definition of aggregate accounts to ensure complete separation between the funds of the participants in the financing process and the funds of the crowdfunding facility.
They also determine the ceiling of crowdfunding allowed based on the capital criterion, SAMA statement said.
Supporting and enabling financial technology has led to the emergence of a number of fintech companies, and to the development of technology within financing activity, it said.
SAMA called on the public, specialists and interested individuals to provide their views and observations on the draft rules within 15 days, noting that all views and observations will be under consideration for adopting the final version of these rules.
The draft of new rules can be reached by visiting the Public Consultation Platform affiliated to the National Competitiveness Center, the central bank said.
Crowdfunding is the practice of funding a project or a venture by raising money through the collective effort of a large number of people who each contribute a small amount.
Saudi small and medium enterprises have raised SR100 million ($26.65 million) so far this year through crowdfunding, Mohammed Al-Quwaiz, Saudi Capital Market Authority president recently said.
“In the current year, from the beginning of the year to the middle of the year, crowdfunding platforms collected about SR100 million, all of which are for entrepreneurial companies,” Al-Quwaiz said.