RIYADH — The Capital Market Authority (CMA) Board has approved a set of enhancements aimed at developing the regulatory environment for investment funds in Saudi Arabia. This includes amendments to the Investment Funds Regulations, the Real Estate Investment Funds Regulations, and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority. The amendments approved by the CMA Board aim to develop a regulatory framework for investment funds, enhance the asset management industry, and strengthen its competitiveness by identifying areas for improvement and adopting global best practices. The amendments also include additional regulatory provisions that support the growth of the investment fund and real estate investment fund sectors, enhance transparency and disclosure for fund unit holders, and establish governance standards that ensure greater protection of investors' rights. Key amendments focus on enhancing the efficiency of investment fund management by expanding the categories authorized to distribute fund units to include investment fund distribution platforms and electronic money institutions licensed by the Saudi Central Bank, through their websites or mobile applications. The amendments also address the termination of investment funds and the dismissal of fund managers, in addition to regulating the voluntary withdrawal of managers of public and private investment funds. Among these provisions is the requirement to obtain CMA approval and the obligation of the current fund manager to transfer fund management responsibilities to the successor within 60 days of receiving approval. These measures aim to protect the rights of investors in both public and private funds, ensure a smooth transition of fund management responsibilities, safeguard the interests of unit holders, and enhance investor confidence in the capital market. As part of efforts to expand investment opportunities for Real Estate Investment Traded Funds (REITs) listed on the Parallel Market (Nomu), and to support the diversification of their assets and increase their flexibility to enhance potential returns for investors, the approved amendments allow such funds, at the time of their establishment, to invest in real estate development projects without being bound by the investment ratios and asset restrictions specified in the Real Estate Investment Funds Regulations.
