The Capital Markets Authority announces the approval of amendments to the Investment Funds and Real Estate Investment Funds Regulations, as well as a Glossary of Capital Markets Authority-Defined Terms.
The approved amendments aim to further regulate and develop the capital market by promoting the growth of the asset management industry in the Saudi financial sector, diversifying the sources of financing and refinancing in the economy, regulating aspects of institutional investment, improving investor services, developing securities business activities, creating a competitive environment, and continuing to regulate and develop entities subject to the CMA’s supervision. Additionally, these modifications seek to improve investment fund governance and investor protection following international best practices and standards.
The amendments’ primary components are as follows:
- Providing fund managers with an extra option to establish a special purpose corporation to confer legal personality on the investment fund while retaining the ability to continue contractual ties with unitholders.
- Developing numerous areas of investment fund governance to elevate the quality of governance in the capital market following international best practices and standards.
- Governing termination and liquidation procedures for public and private funds following worldwide best practices and standards.
- Allowing closed-ended funds and real estate investment traded funds to redeem their units and sell their treasury units following the Investment Funds and Real Estate Investment Funds Regulations.
- Increase the level of transparency and disclosure in the reporting of investment funds.
- Align the timelines for public investment funds and public real estate investment funds, including real estate investment traded funds, to disclose financial statements and annual reports (REITs).
- Strengthen the role of public funds and real estate private funds’ boards of directors in monitoring and supervising the fund management and protecting unitholders.
- Permitting public investment funds to subscribe to debt instruments issued through a private placement via a specific structure.
How can j. awan & partners help?
Our in-house professionals can help guide you in understanding how these regulations may apply to your business as well as assist in new regulatory license applications; license variations; and the drafting of Compliance, AML and Risk Frameworks relating to virtual assets.
The amended Investment Funds Regulations, Real Estate Investment Funds Regulations, and Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority can be viewed via the following links:
The Investment Funds Regulations
The Real Estate Investment Funds Regulations
Amended Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority
