RIYADH — The Saudi Capital Market Authority (CMA) has approved a regulatory framework to develop financing investment funds by introducing amendments to their governing instructions. This is aimed at strengthening their role as financing channels in the Saudi capital market and enabling additional products that support economic growth and meet investor needs.According to a press release issued by the CMA on Thursday, the amendments enable the public offering of financing investment funds, after previously being limited to private placements, and allow their listing on both the Main Market Tadawul All Share Index (TASI), and the Nomu Parallel Market, contributing to the diversification of investment products and increasing assets under management. They also consolidate the provisions governing financing investment funds into a single regulatory document to unify the legislative framework and enhance regulatory clarity.In addition, the CMA approved changing the title “Instructions on the Direct Financing Investment Funds” to “Instructions on the Financing Investment Funds” to cover both direct and indirect financing funds, reflecting the broader scope of activities and the updated regulatory framework. The amendments further develop regulatory requirements related to fund operations and management, improving efficiency and alignment with best practices.The authority stated that the new framework introduces key risk-management requirements for public financing funds, including a cap on total borrowing at 15 percent of net asset value. For funds listed on the Parallel Market, total borrowing must not exceed 50 percent of the fund’s total size. It also stipulates that public indirect financing funds must not have exposure of 25 percent or more to a single beneficiary or beneficiaries within the same group, in line with requirements for direct financing funds.The amendments also define investment scopes to limit exposure to highly volatile or low-liquidity assets, supporting effective liquidity management until suitable financing opportunities arise. They allow private financing investment funds to be structured as open-ended funds under specific regulatory conditions and classify public financing funds as a category of specialized public funds.Updated definitions for direct and indirect financing funds were introduced, along with additional obligations on fund managers and enhanced disclosure requirements in quarterly and annual reports to unit holders, strengthening transparency and governance.The move is part of the CMA’s ongoing efforts to develop the capital market’s regulatory infrastructure and open new financing channels, supporting economic growth and reinforcing the Saudi capital market’s position as an attractive destination for local and international investors.The framework follows the CMA’s publication in August of the draft regulatory framework for financing investment funds on the Istitlaa Public Consultation Platform of the National Competitiveness Center and the CMA’s website for a 30-day public consultation period.RIYADH — The Saudi Capital Market Authority (CMA) has approved a regulatory framework to develop financing investment funds by introducing amendments to their governing instructions. This is aimed at strengthening their role as financing channels in the Saudi capital market and enabling additional products that support economic growth and meet investor needs.According to a press release issued by the CMA on Thursday, the amendments enable the public offering of financing investment funds, after previously being limited to private placements, and allow their listing on both the Main Market Tadawul All Share Index (TASI), and the Nomu Parallel Market, contributing to the diversification of investment products and increasing assets under management. They also consolidate the provisions governing financing investment funds into a single regulatory document to unify the legislative framework and enhance regulatory clarity.In addition, the CMA approved changing the title “Instructions on the Direct Financing Investment Funds” to “Instructions on the Financing Investment Funds” to cover both direct and indirect financing funds, reflecting the broader scope of activities and the updated regulatory framework. The amendments further develop regulatory requirements related to fund operations and management, improving efficiency and alignment with best practices.The authority stated that the new framework introduces key risk-management requirements for public financing funds, including a cap on total borrowing at 15 percent of net asset value. For funds listed on the Parallel Market, total borrowing must not exceed 50 percent of the fund’s total size. It also stipulates that public indirect financing funds must not have exposure of 25 percent or more to a single beneficiary or beneficiaries within the same group, in line with requirements for direct financing funds.The amendments also define investment scopes to limit exposure to highly volatile or low-liquidity assets, supporting effective liquidity management until suitable financing opportunities arise. They allow private financing investment funds to be structured as open-ended funds under specific regulatory conditions and classify public financing funds as a category of specialized public funds.Updated definitions for direct and indirect financing funds were introduced, along with additional obligations on fund managers and enhanced disclosure requirements in quarterly and annual reports to unit holders, strengthening transparency and governance.The move is part of the CMA’s ongoing efforts to develop the capital market’s regulatory infrastructure and open new financing channels, supporting economic growth and reinforcing the Saudi capital market’s position as an attractive destination for local and international investors.The framework follows the CMA’s publication in August of the draft regulatory framework for financing investment funds on the Istitlaa Public Consultation Platform of the National Competitiveness Center and the CMA’s website for a 30-day public consultation period.
