The Capital Market Authority (CMA) called upon relevant and interested persons participating in the capital market to share their feedback on the proposed project to develop the regulatory environment for investment funds in the Kingdom. The consultation period will last for a period of 30 calendar days ending on 07/09/1446H corresponding to 07/03/2025.
The proposed project aims to enhance the regulatory framework for investment funds by strengthening the asset management industry and boosting its competitiveness by identifying areas for development and adopting global best practices. Additionally, the project seeks to increase transparency and disclosure levels for fund unit holders, ensure governance standards that protect investor rights, and align with the CMA's strategic objectives to enhance the appeal of asset management in the Kingdom.
The launch of this project coincides with a significant milestone achieved by the entities supervised by the CMA, as the total managed assets surpassed the one trillion mark by the end of 2024.
The key amendments focused on enhancing the efficiency of investment fund management by enabling the distribution of fund units through investment fund distribution platforms and companies licensed by the Saudi Central Bank to provide e-wallet services, as well as improving provisions for terminating investment funds and dismissing fund managers.
Additionally, the project outlines specific provisions for the voluntary withdrawal of public and private fund managers. Among these provisions is the requirement for CMA approval, with the current fund manager being obligated to transfer management responsibilities to the successor within 60 days of receiving approval. This ensures the protection of investors' rights in public, private, and real estate investment funds, facilitates a smooth transition of fund management, safeguards unit holders' interests, and bolsters investor confidence in the capital market.
At the level of real estate investment funds listed on the Parallel Market (Nomu), the proposed amendments include allowing these funds, upon their establishment, to invest in real estate development projects without being bound by the investment policy percentages and asset restrictions stipulated in the Real Estate Investment Funds Regulations. This is expected to expand investment opportunities for these funds, support the diversification of their assets, and increase flexibility in this type of fund, thereby enhancing their potential returns for investors.
The project also aims to allow capital market institutions licensed to conduct investment management activities to distribute foreign funds and offer their securities in the Kingdom, in accordance with specific requirements. This initiative seeks to enable clients in the Kingdom to invest in foreign funds.
Furthermore, the proposal includes the development of several other regulatory provisions aimed at fostering the growth of the investment fund and real estate investment fund sectors.
The CMA emphasized that the comments of relevant and interested persons shall be taken into full consideration for the purpose of approving the final Proposed Amendments, which in turn shall contribute to the aim of enhancing and developing the regulatory environment. 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 Amendment to the Investment Funds Regulations, Real Estate Investment Funds Regulations, and Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority
Prescribed form for providing comments
