CMA seeks public feedback on draft bill for establishing simplified investment funds

Logo of Capital Market Authority (CMA)

The Capital Market Authority (CMA) invited market participants and stakeholders to submit their feedback on the draft bill allowing the establishment of simplified investment funds, during a 30-day consultation period ending Nov. 6.

The proposal aims to create a flexible regulatory framework for launching low-cost funds with greater flexibility in structuring and managing relationships between fund managers and investors. The move targets meeting the investment needs of specific investor categories.

The CMA said the rules are modeled on the limited partnership (LP/GP) structure used in alternative funds globally, which separates roles between general and limited partners. The draft was prepared in line with global practices and the evolving Saudi financial sector.

The project is part of the CMA efforts to make the Saudi asset management industry more attractive by adopting international standards and expanding the role of investment funds in generating new opportunities for investors.

Key features include limiting offerings to eligible investors and waiving the need for a custodian when the fund is structured as a special purpose vehicle.

The framework also permits offerings to non-resident foreign investors, the Saudi government, public entities, and other licensed financial institutions through fund managers holding an international securities business license.

The draft bill allows fund managers more flexibility in notifying the CMA about new funds, provided notice is given before the proposed launch date.

Once approved, the framework would enable fund managers and investors to define their own contractual terms, such as fund termination, unit class features, reporting requirements, amendment rights, and meeting procedures.

The CMA expects the initiative to strengthen the investment fund regulatory environment and boost its market appeal.

The plan complements the draft International Securities Business License framework published in May 2025. Together, they aim to expand Saudi Arabia’s asset management industry from a local to a global level, reinforcing its position as a regional financial hub attracting international capital.

Saudi Arabia’s managed assets exceeded SAR 1 trillion in 2024, up 20.9% from SAR 871 billion in 2023. Investment funds made up over SAR 700 billion, growing 25.2% year-on-year (YoY), with private funds representing 75% of total assets. The number of fund participants rose 64.9% to 152,405 by end-2024.

The CMA said comments from individuals, government entities, and the private sector will be reviewed before finalizing the rules. Feedback can be submitted through the Istitlaa platform or via Laws.Regulations@cma.org.sa.

The full draft is available to the public on the CMA website