CMA seeks feedback on draft amendments of investment fund regulations

Logo of The Capital Market Authority (CMA) 

The Capital Market Authority (CMA) called upon relevant and interested persons participating in the capital market to share their feedback on the draft amendments of investment funds regulations for public consultation for a period of 15 days ending on Nov. 5, 2024.

The draft aims to develop the provisions of the investment funds regulations by amending the requirements for offering private and foreign investment funds to retail clients, with the goal of enhancing investor protection, the regulator said, in a statement.

It includes a provision that prohibits offering units of private funds to retail clients unless the fund manager collects total cash subscriptions from qualified clients and institutional clients equal to or greater than the total cash subscriptions intended to be collected from retail clients.

The draft also includes a proposal to add a provision that prohibits the private offering of securities issued by a foreign fund to retail investors unless the fund manager collects total cash subscriptions from qualified clients and institutional clients in the Kingdom equal to or greater than the total cash subscriptions intended to be collected from retail clients.

In 2021, CMA allowed retail clients to subscribe to private and foreign investment funds without specifying their subscription percentage compared to qualified and institutional clients, provided that the retail client's subscription does not exceed SAR 200,000 (or its equivalent) per client. The current proposed amendment seeks to set a percentage for their cash subscriptions to these funds, aiming to enhance investor protection for retail clients and reduce their risk exposure, as private and foreign funds generally have fewer restrictions compared to public funds.

Opinions and comments can be received through any of the following: The Unified Electronic Platform for Consulting the Public and Government Entities affiliated with the National Competitiveness Canter through the following link: (istitlaa.ncc.gov.sa ), or the prescribed form through the following email: (Laws.Regulations@cma.org.sa)