Image: Getty Images/ For illustrative purposes
Saudi Arabia’s Capital Market Authority (CMA) has approved a wide-ranging package of regulatory reforms aimed at strengthening the asset management industry and aligning it with international standards.
The approved amendments cover the Investment Funds Regulations, Real Estate Investment Funds Regulations, and the Glossary of Defined Terms.
The reforms are intended to improve transparency, investor protection, fund governance, and operational flexibility, particularly for investment fund managers and real estate investment trusts (REITs).
CMA’s key changes include
- Expanded distribution channels: Digital platforms and electronic money institutions licensed by the Saudi Central Bank can now distribute fund units, enabling broader access for investors.
- New REIT flexibility: Real estate funds traded on the parallel market (Nomu) can invest in development projects without initial asset or percentage restrictions.
- Risk reduction: Money market and capital protection funds must cap exposure to a single debt instrument at 10 per cent and total exposure to one entity at 25 per cent of net assets.
- Improved governance: Rules now require CMA approval and a 60-day transition period for changes in fund management, ensuring continuity and investor protection.
- Retail investor limits: Caps were introduced to limit retail investor subscriptions in private and foreign funds to 50 per cent of total contributions, preventing concentration risks.
These changes follow a record year in 2024 when the CMA approved 44 new investment funds, including equity, money market, Waqf (endowment), and ETF funds.
Assets under management reached nearly SAR700bn, growing 25.2 per cent year-on-year.
The CMA said the reforms were finalised after public consultations held in June and October 2024 and in February earlier this year.
