CMA Implements Regulatory Enhancements to Bolster Saudi Investment Fund Sector
Saudi Arabia's Capital Market Authority updates investment fund rules to boost competitiveness and investor protection.
The Saudi Capital Market Authority (CMA) has introduced a series of regulatory reforms aimed at bolstering the investment fund sector within the Kingdom.
The enhancements, announced on Wednesday through an official press release, encompass amendments to the Investment Funds Regulations, Real Estate Investment Funds Regulations, and the regulatory glossary.
The revisions are targeted at refining the legal framework governing investment funds to enhance their competitiveness.
They are part of Saudi Arabia's broader strategy to deepen its capital markets and draw in both domestic and international investments, as outlined in Vision 2030 economic diversification plans.
According to a CMA board resolution, these reforms seek to expand and develop the investment fund and REIT sectors, heighten transparency for unitholders, and bolster investor protection through more stringent governance standards.
Among the key modifications is an expansion of the entities permitted to distribute investment fund units.
Under new guidelines, fund units can now be distributed via licensed investment platforms and e-money institutions authorized by the Saudi Central Bank, accessible through their digital channels.
Other reforms address procedures for fund termination and the removal of fund managers, alongside updated directives for voluntary exits by managers of both public and private funds.
A mandatory step under these rules is CMA approval for such actions, coupled with a requirement for outgoing managers to transfer all management duties to a successor within 60 days, aiming to ensure investor rights and smooth transition processes.
Additionally, the CMA has decided to allow real estate investment funds listed on the parallel market to invest in real estate development projects immediately upon fund establishment.
These investments will not be subject to the conventional asset allocation ratios and restrictions previously set forth in the Real Estate Investment Funds Regulations.
The enhancements, announced on Wednesday through an official press release, encompass amendments to the Investment Funds Regulations, Real Estate Investment Funds Regulations, and the regulatory glossary.
The revisions are targeted at refining the legal framework governing investment funds to enhance their competitiveness.
They are part of Saudi Arabia's broader strategy to deepen its capital markets and draw in both domestic and international investments, as outlined in Vision 2030 economic diversification plans.
According to a CMA board resolution, these reforms seek to expand and develop the investment fund and REIT sectors, heighten transparency for unitholders, and bolster investor protection through more stringent governance standards.
Among the key modifications is an expansion of the entities permitted to distribute investment fund units.
Under new guidelines, fund units can now be distributed via licensed investment platforms and e-money institutions authorized by the Saudi Central Bank, accessible through their digital channels.
Other reforms address procedures for fund termination and the removal of fund managers, alongside updated directives for voluntary exits by managers of both public and private funds.
A mandatory step under these rules is CMA approval for such actions, coupled with a requirement for outgoing managers to transfer all management duties to a successor within 60 days, aiming to ensure investor rights and smooth transition processes.
Additionally, the CMA has decided to allow real estate investment funds listed on the parallel market to invest in real estate development projects immediately upon fund establishment.
These investments will not be subject to the conventional asset allocation ratios and restrictions previously set forth in the Real Estate Investment Funds Regulations.
