The Capital Market Authority (“CMA") called upon relevant and interested persons participating in the capital market to share their feedback on the Draft Amendments of Investment Funds Regulations (“Draft") for Public Consultation for a period of fifteen (15) days ending on 03/05/1446AH, corresponding to 05/11/2024.
The project aims to develop the provisions of the Investment Funds Regulations by amending the requirements for offering private and foreign investment funds to retail clients, with the goal of enhancing investor protection.
The proposal includes a provision that prohibits offering units of private funds to retail clients unless the fund manager collects total cash subscriptions from qualified clients and institutional clients equal to or greater than the total cash subscriptions intended to be collected from retail clients.
The project also includes a proposal to add a provision that prohibits the private offering of securities issued by a foreign fund to retail investors unless the fund manager collects total cash subscriptions from qualified clients and institutional clients in the Kingdom equal to or greater than the total cash subscriptions intended to be collected from retail clients.
In 2021, the Capital Market Authority allowed retail clients to subscribe to private and foreign investment funds without specifying their subscription percentage compared to qualified and institutional clients, provided that the retail client's subscription does not exceed SAR 200,000 (or its equivalent) per client. The current proposed amendment seeks to set a percentage for their cash subscriptions to these funds, aiming to enhance investor protection for retail clients and reduce their risk exposure, as private and foreign funds generally have fewer restrictions compared to public funds.
The Authority emphasized that the comments of relevant and interested persons shall be taken into full consideration for the purpose of finalizing the Draft. Opinions and comments can be received through any of the following:
§The Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Canter through the following link: (istitlaa.ncc.gov.sa ).
§The prescribed form through the following email: (Laws.Regulations@cma.org.sa)
The Draft can be viewed via the following link:
The Draft to Develop the Provisions for Offering Private and Foreign Funds to Retail Clients
Prescribed form for providing comments
