New amendments to the investment funds system … and 6 areas for investment

The Capital Market Authority explores the opinions of specialists on developing the organizational environment of investment funds in the Kingdom, with the aim of developing regular provisions.
As well as strengthening the asset management industry and raising its competitiveness by identifying the development reservoirs and adopting international best practices, including the evaluation and development of the investment funds list and a regulation.

The list of investment funds

The Authority has modified Article 11 of the list of investment funds, which include financial statements, and the commitment stipulates that the fund is prepared for the fund in the Arabic language.
At least half annual for the public fund and the private real estate fund, additional copies may be prepared in other languages, and in the event of any conflict between these copies, it is taken by the Arabic text.
And it required the fund’s initial lists to prepare the fund in accordance with the approved accounting standards of, and to examine them in accordance with the criteria of review approved by the Saudi Commission for Auditors and Accountants.

Preparing a record of unit owners

And it stipulated that the fund operator prepare a record of Al -Wehdat owners and preserving it in the Kingdom, while it authorized the assignment of a body subject to the supervision of the authority under a contract written in preparation and preservation of the record.
She emphasized that the operator should bear the responsibility of performing all his duties regarding the registry of the unit owners according to these regulations.
The authority proposed to add two sub -paragraphs bearing the arrangement (4) and (5) to paragraph (and) of Article seventeen of the draft amendment of the investment funds list; To enable the distribution of investment fund units.
And that is through the investment fund distribution platform and a licensed company from the Saudi Central Bank by providing electronic portfolio services, namely (investment fund distribution platform), and (a licensed company from the Saudi Central Bank to provide electronic portfolio services).

Monetary Markets Fund

The authority stated a new amendment in Article 19 that any opposite of services and commissions and the management of the administration imposed on the fund in accordance with at least similar conditions for the conditions concluded by people who deal completely independently, and it is not permissible in any case to increase in exchange for services, commissions and management fees above the exact limit appointed In the terms and conditions of the fund.
The new amendments to the authority were approved imposing a higher limit for any for services, commissions, or fees imposed by the Director of the General Fund.
The authority banned the director of the Monetary Markets Fund to invest the funds and funds of the fund except in 6 areas, which are the deals of the monetary market concluded with a party subject to the organization of the Saudi Central Bank or to a similar supervisory body for the Saudi Central Bank outside the Kingdom, debt tools, and derivative contracts.
As well as bank deposits of institutions subject to the regulation of the Saudi Central Bank or subject to a similar supervisory body for the Saudi Central Bank outside the Kingdom, or units of public cash market funds with similar strategy, or units of public debt tools with fixed income.

Investment funds list

As for foreign funds, the authority proposed amending paragraph (C) of Article 97 and adding a paragraph bearing the arrangement (D) to the draft amendment of the list of investment funds.
This is with the aim of allowing the financial market institutions licensed to exercise the investment management activity to distribute foreign funds and offer their securities in the Kingdom.
This comes with the requirement that the foreign fund to be distributed and the proposal of its securities in the Kingdom is based on it and that the percentage of the ownership of foreign investors in the foreign fund to be distributed and its financial papers in the Kingdom should not be less than 50 % of the total value of the fund’s units.

Real estate investment funds

The authority made new amendments to the list of real estate investment funds, including adding a paragraph bearing the arrangement (C) to Article 18 of the draft amendment of the list of real estate investment funds, so that the preparation of the initial financial statements of the fund, which has been established for a period of less than (3) months.
The authority suggested adding a paragraph bearing the arrangement (d) of Article 26, which obliges the fund manager to obtain the approval of the authority before the approval of the units’ owners of the basic change of the proposed fund related to increasing the total value of the closed fund assets by accepting cash or in -kind contributions or both, in an exception From paragraph (c) of the same article.
The sub -paragraph (4) of paragraph (C) of Article 47 of the draft amendment of the list of real estate investment funds; By replacing the phrase “in the name of one recipient party”, with the phrase “with the names of two received sides.”