CMA OKs instructions on offering real estate contributions certificates

Logo of The Capital Market Authority (CMA)

The Capital Market Authority’s (CMA) board approved instructions on offering real estate contributions certificates and rules on the offer of securities and continuing obligations and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority, which will come into effect as of the publication date.

The approval is based on the CMA's roles as stipulated by the Real Estate Contributions Law specifically in regulating the register of shareholders for real estate contribution, and regulating the issuance of the real estate contribution certificate, which proves the shareholder's ownership of a share in the real estate contribution. In addition, the agreement with the Real Estate General Authority (REGA) regarding regulating the collection of funds for the purpose of offering real estate contributions, in order to keep pace with the great development witnessed in the real estate sector, and to open new financing and investment channels.

The instructions aim to regulate registering and offering real estate contribution certificates, including determining the requirements to be met before the certificates offering, marketing, announcing them, or collecting funds for them, and the requirements for private and public offerings of these certificates, in addition to regulating the obligations of the capital market institution through which the offering shall take place, regulating the shareholders' register and the requirements of maintaining books and records.

According to the key provisions of the approved instructions, the capital market institution, through which the offering shall take place, must ensure to provide investors in the real estate contribution with enough information that shall enable them to make an insightful and informed investment decision and ensures that the said information is comprehensive, clear, correct, and not misleading. The Instructions also stipulated that if the offering is not completed, it shall be canceled and subscribers' funds shall be refunded without any deductions within no more than ten days from the offering period's expiry, provided that the CMA is notified.

Among the instructions is the requirement for the capital market institution through which real estate contribution certificate will be offered, to submit a written application to CMA including the required data and documents at least ten days before the proposed date of the private placement of real estate contribution certificates, while 30 days at least are set for reviewing public offering requests before issuing its decision to approve according to the conditions and controls it deems appropriate, or reject the request.

The approval of the Instructions comes after the CMA published on November 6, 2023 the Draft of the “Instructions on the Offering of Real Estate Contributions Certificates" on the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform) affiliated with the National Competitiveness Center and the CMA's website for public consultation. The above step was in line with amending the Rules on the Offer of Securities and Continuing Obligations and the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority following the public consultation on the amendments set out therein.

The instructions on offering real estate contributions certificates, the amended rules on the offer of securities and continuing obligations, and the amended glossary of defined terms used in the regulations and rules of the CMA can be viewed via the following links:

Instructions on the Offering of Real Estate Contributions Certificates

Amended Rules on the Offer of Securities and Continuing Obligations

Amended Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority​