CMA approves simplified investment funds

Logo of Capital Market Authority (CMA)

The Saudi Capital Market Authority (CMA) announced the approval of regulations enabling the establishment of simplified investment funds.

The authority said the decision aims to provide a regulatory framework for highly flexible investment funds with lower setup and management costs.

These funds also allow greater flexibility in structuring and in defining the contractual relationship between fund managers and investors, helping meet the investment needs of the targeted client segments.

According to the CMA, the framework governs the offering of fund units to institutional clients under the Simplified Investment Funds instructions, requiring management by a CMA-licensed fund manager authorized to conduct investment management or fund management activities.

The new framework also offers greater flexibility in the contractual relationship between fund managers and unit holders, specifying provisions in the fund’s terms and conditions.

This includes controls over the types of investment units issued, reporting mechanisms for unit holders, policies for amending fund terms, and the organization of unit holders’ meetings.