What is the objective of the Real Estate Investment Funds Regulations?
These Regulations aim at regulating the establishment, offering, and management of Real Estate investment Funds, protection of Unitholders rights and the application of disclosure and transparency rules. These Regulations should be read in conjunction with and in addition to the Authorised Persons Regulations and the Securities Business Regulations
What does Real Estate Investment Fund mean?
A Real Estate Investment Fund means a collective real estate investment scheme which aims to provide the chance for investors to participate together in the scheme’s profits, managed by the Fund Manager for a specified fee.
What are the Authority approval requirements to offer units for a public Real Estate Investment Fund?
(a) The applicant, seeking the Authority approval to offer units for a Real Estate Investment Fund should be authorised by the Authority to conduct managing business.
(b) Units of Real Estate Investment Fund shall not be offered by way of a public offer unless the Authority has first received and approved the information referred to in Article (3).
(c) The application for offering units of Real Estate Investment Fund shall include the information set forth in Article (3) of Real Estate Investment Fund Regulations.
(d) To provide any other requirement the Authority requests with accordance to the Capital Market Law and its Implementing Regulations.
What is the contractual form of the real estate fund?
A contractual relationship is developed between the Fund Manager and Unitholders as soon as the authorised Fund’s Terms and Conditions are signed according to Real Estate Investment Fund Regulations.
What is the type of the real estate investment funds?
They are closed-ended Real Estate Investment Funds., which operate according to the objectives set forth in Article (6) of the Real Estate Investment Funds Regulations. Funds may be established for other purposes as per terms and conditions set by the Authority.
What are the types and objectives of real estate investment funds?
Real estate investment funds operate according to the following objectives:
a) Initial Development then Selling: This is in the form of owning a piece of raw land, developing it, dividing it into residential or commercial plots, then selling it and terminating the Fund.
b) Constructional Development then Selling: This is in the form of owning a piece of raw or developed land with the purpose of constructing residential or commercial units, then selling it and terminating the Fund.
c) Initial or Constructional Development with the intention of leasing it for a certain period of time then selling it and terminating the Fund.
Funds may be established for other purposes as per terms and conditions set by the Authority.
Who is the fund manager? What is his role?
A person authorised to perform management business according to the Authorized Persons Regulations, who is responsible for the management of the Fund’s assets.
Who is the developer and the Engineering Office? What is their role?
A person nominated by the Fund Manager and responsible for the execution of the technical aspects to attain the Fund’s purposes.
Who may subscribe in the fund?
Without prejudice to the rule of Real Estate Ownership for Non-Saudis in the Kingdom, subscription in the Fund is open to any Saudi, GCC citizens or non- Saudi residents in the Kingdom.
How can a potential investor subscribe to the fund?
A potential investor can subscribe to the fund by visiting a fund manager's branch and pay the full unit value during the subscription period as per the fund's terms and conditions.
What are the unitholder's rights upon his subscription?
A fund manager shall provide the unitholder with a signed copy of the fund's terms and conditions, and send a subscription confirmations notice to the unitholder.
Who is the Accredited Valuer?
A person chosen by the Fund Manager, to evaluate the Fund’s assets, who should have the required knowledge and experience to provide Real Estate evaluation services. Evaluators and vlauers shall be active members of the Saudi Authority for Accreditied valuers (taqeem).
What is the purpose of the Listing Rules?
The purpose of these Rules is to regulate the public offering, registration and admission to listing of securities in the Kingdom.
Shall the Listing Rules apply to the offering of units in investment funds?
These Rules shall not apply to the offering of units in investment funds.
Are there any issuances that does not require a prospectus?
A prospectus is not required for the issue of further securities by an issuer whose securities are already listed where:
a) the securities to be issued would increase the securities of a class already listed by no more than 10%;
b) shares issued as a result of capitalisation;
c) an employee share scheme;
d) shares issued as a result of the conversion of debt instruments convertible into shares of a class already listed; or
e) split of shares already issued.
