CMA seeks public opinion on amending REITs, closed-end funds’ rules

Saudi Arabia’s Capital Market Authority (CMA) has called on the public to share their opinions by March 9 on amending the rules of the Real Estate Investment Traded Funds (REITs) and the Closed-End Investment Funds.

The amendments to REITs' rules are aimed to enhance investor protection and boost investments in these funds, the market regulator said in a statement on Tadawul on Thursday.

Under the new rules, a mechanism was developed for funds' capital hike and the minimum limit for launching a new fund was raised to SAR 500 million from SAR 100 million.

The assets targeted for acquisition by listed REITs are required to generate leasing profit over the last three years ahead of acquisition. REITs were also allowed to invest a 25 percent maximum of the total value of assets in usufructs and renovation of assets.

The other amendments on the close-ended funds aim to regulate their offering, registration, listing processes, in addition to the management of the related activities in the Kingdom.

Under the proposed rules, unit holders are allowed to exercise all unit-related rights, including voting, direct listing of funds subject to fulfillment of CMA requirements, and disclosure of funds' launch costs.

The minimum limit for funds' total value of assets should be no less than SAR 500 million upon launch.