Riyadh: The Capital Market Authority (CMA) has invited relevant and interested parties in the capital market to provide their feedback on the draft instructions regarding the establishment of simplified investment funds. The consultation period will remain open for 30 calendar days, ending on 15/05/1447H, corresponding to November 6, 2025.
According to Saudi Press Agency, the draft aims to create a regulatory framework that allows for the establishment of flexible, cost-efficient investment funds with greater structuring freedom and adaptability in managing contractual relationships between fund managers and investors. The objective is to meet the investment needs of various client categories targeted by these funds.
When developing the proposed framework, the CMA considered the main flexibility features of the Limited Partnership (LP/GP) structure, commonly adopted in many countries for alternative investment funds. The draft draws from international best practices to align with the development of the Kingdom's financial sector and its diverse investor base.
This initiative forms part of the CMA's broader efforts to enhance the attractiveness of the asset management sector in the Kingdom by adopting leading global practices to develop an efficient financial ecosystem capable of creating more investment opportunities for all investors.
Key provisions of the proposed draft include limiting fund offerings to eligible client categories in line with the stipulated requirements and waiving the obligation to appoint a custodian when the fund is established as a special purpose entity. The draft also allows fund units to be offered to non-resident foreign investors, the Government of Saudi Arabia, government entities, and any public legal entity in accordance with applicable regulations, provided that the fund manager holds an Offshore Securities Business License.
Under the proposal, fund managers would be granted greater flexibility in notifying the CMA about fund establishment, provided the Authority is informed before the fund's proposed launch date. Once adopted, the rules would enable flexible arrangements governing the relationship between fund managers and unit holders, including fund termination and liquidation rules, unit class characteristics, reporting mechanisms, amendment policies, and unit holder meeting procedures.
The CMA expects that enabling the establishment of such funds will strengthen the regulatory environment for investment funds in the Kingdom and enhance their overall competitiveness. Together with the regulatory framework for the Offshore Securities Business License-published for consultation in May 2025-the proposed rules represent a key step toward positioning Saudi Arabia's asset management sector as a regional and global hub. This integration will enhance the Saudi market's appeal to international capital and expand investment opportunities.
The asset management sector achieved substantial growth in 2024, with total assets surpassing SAR1 trillion, an increase of 20.9% compared to 2023, when assets stood at SAR871 billion. Investment funds accounted for over SAR700 billion, a 25.2% rise from the previous year, with private investment funds representing 75% of the total. The number of fund subscribers also grew by 64.9% to reach 152,405 by the end of 2024.
The CMA affirmed that all feedback received will be carefully reviewed before final approval of the proposed amendments, with the goal of enhancing and developing the Kingdom's regulatory framework.
Opinions and comments may be submitted through the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Center, through the following link (istitlaa.ncc.gov.sa), or by email using the prescribed form to ([email protected]).
The draft instructions and glossary amendments can be viewed through the following links: the Draft Instructions of Simplified Investment Funds and Amendments to the Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority, and the Prescribed Form for Providing Comments.