Regulatory Alerts2022-03-15
Instructions on Financing Investment Funds
The Capital Market Authority of Saudi Arabia has issued these Instructions to regulate the establishment, offering, and management of direct and indirect financing investment funds. The rules mandate minimum fund sizes, cap single-beneficiary exposure at 25 percent, restrict borrowing to a maximum of 15 percent (or 50 percent for listed public funds), and require comprehensive credit assessment, record-keeping, and conflict-of-interest disclosures by fund managers. Fund managers must implement standardized reporting frameworks, including detailed annual and quarterly disclosures on lending ratios, default rates, sector exposure, and dual unit pricing, to ensure transparency for unitholders.
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