CMA implements GCC investment funds passporting regime 

The Capital Market Authority (CMA) has adopted the Cross-border Registration Regulation for Investment Funds, commonly referred to as the GCC Funds Passporting Regime, effective since the beginning of 2025.

This unified regulatory framework governs a set of rules and controls that standardize the registration and promotion of investment funds across GCC member states, outlining criteria these funds should meet. It is part of the GCC's Regulatory Framework for passporting financial products.

These rules are bound to streamline the movement of investment funds across GCC member states, promoting seamless cross-border operations and strengthen integration among the Gulf financial markets.

They specify the responsibilities of fund managers and promoters; improve service provision; address regulatory challenges; and unlock new mechanisms to attract more foreign capital.

Under the regulation, cross-registration must be carried out through both the investment fund’s registering regulatory body (home state) and host regulatory body (destination state). Applications must specify whether the fund is public or private and designate a local placement agent to which this investment fund’s promotion within host jurisdictions shall be delegated.

Host regulatory bodies are responsible for managing fund passporting applications and compliance pursuant to the standards and requirements set out by each GCC country’s financial regulatory authorities, especially those related to the placement agent’s activities and investor relationship. It also empowers the host authority to take necessary measures to protect investors.

The recently-introduced regulation enables funds established in Saudi Arabia to be passported into other GCC countries that have adopted this unified regime, provided compliance with the host country’s laws and regulations.

Fund managers are also mandated to meet certain obligations and adhere to a formalized application process. The fund manager must submit the prescribed application form to the registered regulatory authority and must provide the same documents to investors in the host and destination markets, ensuring transparency and sufficient data for well-informed investment decisions.

Among the key features of the new regulatory framework is the streamlined offering process of Saudi investment funds in GCC markets, while complying with both Saudi financial market regulations and the fund passporting regime.

It also outlines the placement agent’s obligations during both the application phase and post-fund passporting.

Through this initiative, the CMA aims to enhance market liquidity, strengthen the economic scales and competitiveness of GCC countries, achieve financial market integration, unify investment-related policies and regulations, while enhancing governance and transparency in a bid to promote local, regional, and international investment growth.