Subject to the provisions of Article 1 of the Law, the following terms and phrases – wherever mentioned in this Regulation – shall have the meanings assigned thereto unless the context requires otherwise:

• Law: Finance Lease Law. Regulation: Implementing Regulation of the Finance Lease Law.

• Regulation: the Implementing Regulation of the Finance Lease Law.

• SAMA: Saudi Central Bank .

• Contract: Finance lease contract.

• Lessor: A joint stock company licensed to offer finance lease, including commercial banks.

• Lessee: A person holding the right to use the leased asset under a contract.

• Leased Asset: Any asset that can be leased, including real estate, movables, rights, services and intangible rights such as intellectual

• property rights.

• Contract Register: A register for finance lease contracts concluded or executed in the Kingdom, sales contracts resulting from

• finance lease and any amendments thereto in accordance with the provisions of the Law.

• Contract Registration Company: A joint stock company in charge of the registration of finance lease contracts.

• Securitization: Issuance of securities against lessor’s rights.

In consideration of the provisions of Article Two of the Law, the Finance Companies Control Law, and other applicable regulations, the financial leasing activity shall be considered a professional activity upon the fulfillment of the following:

• 1. The lessor must obtain the leased asset for the purpose of leasing it to others as a financial lease.
• 2. The volume of financial leasing activity must exceed the limit determined by the bank.

The lessee may, upon a written consent by the lessor, assign the contract to another lessee. The lessor shall, within not more than 10 business days of the assignment date, record his consent in the contract register. The lessor's refusal to give consent shall be reasoned.

The lessor may assign his rights under the contract without the consent of the lessee, unless the contract stipulates otherwise. In all cases, the following shall be fulfilled in the event of assignment:

• 1. It shall not be detrimental to the lessee;

• 2. It becomes effective on the date of recording in the contract register;

• 3. It does not relieve the lessor from obligations under the contract; and

• 4. If it results in change in the recipient of the lease payments, such change shall be enforceable against the lessee from the date of notification.

If the leased asset requires inspection by the lessor, the inspection means, time and duration shall be specified in the contract or one of its appendices, provided this is not detrimental to the lessee or restricts his use of the leased asset.

1. The lessee shall promptly notify the lessor in writing or electronically of any change in the leased asset that entirely or partially preclude enjoyment thereof, using the contact details provided in the contract and in accordance with applicable notification rules.

2. If the lessor fails to remove any obstacles to full or partial enjoyment of the leased asset within the period prescribed in the contract, the lessee may take the appropriate measures for the protection of the leased asset and the full enjoyment thereof at the lessor’s expense, deducting the costs of such measures from subsequent lease payments

1. In the event of issuing securities against the lessor's rights, in accordance with the regulations and rules issued by the Capital Market Authority, the lessor remains obligated to immediately disclose to the bank all technical, commercial, legal, or other risks related to the contract, the leased asset, or the process of issuing securities against the lessor's rights in general.

2. The lessor's obligation continues, in the event of issuing securities, to comply with all relevant supervisory requirements.

The lessor or his designee may obtain the license referred to in Article 13 of the Law if obtaining such license is a condition for concluding the contract. In such case, the licence shall include the name of the lessee in possession of the leased asset.