Saudi CMA Approves New Regulatory Enhancements to Boost Investment Fund Sector

The Capital Market Authority (CMA) of Saudi Arabia has announced the approval of a series of regulatory enhancements aimed at strengthening the investment fund sector and improving the competitiveness of the Kingdom’s asset management industry.

The updates include revisions to the Investment Funds Regulations, Real Estate Investment Funds Regulations, and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority.

According to the CMA, the amendments are designed to modernize the regulatory framework, align it with international best practices, and support the continued growth of both traditional and real estate investment funds. The initiative is part of broader efforts to deepen the capital market, improve transparency, and uphold investor protections.

Among the key changes are provisions that:

• Expand the range of entities permitted to distribute fund units, now including investment fund distribution platforms and electronic money institutions licensed by the Saudi Central Bank. These may offer units via websites and mobile apps.

• Enhance governance standards by improving oversight of fund terminations and manager transitions.

• Require CMA approval for fund manager resignations or dismissals, with a mandatory 60-day window to complete the transfer of management responsibilities to a new fund manager.

The CMA emphasized that these measures are intended to protect investor rights, ensure smoother transitions in fund management, and strengthen market confidence in public and private investment vehicles.

In a significant step to support the development of Real Estate Investment Traded Funds (REITs) listed on the Nomu Parallel Market, the amendments also remove certain investment ratio and asset allocation restrictions. This change allows REITs, upon establishment, to invest in real estate development projects, thereby enhancing their flexibility and potential for returns.

Overall, the reforms reflect Saudi Arabia’s strategic intent to foster a robust, innovative, and transparent investment environment in line with Vision 2030.