RIYADH: Saudi Arabia’s Capital Market Authority is inviting feedback on proposed amendments to the Investment Funds Regulations, encouraging stakeholders, market participants, and the public to share their insights. The consultation period will run for 15 calendar days, concluding on Nov. 5.
These proposed changes are part of the CMA's ongoing commitment to enhance investor protection by refining the requirements for offering private and foreign investment funds to retail investors.
One key amendment would prohibit the sale of private fund units to retail investors unless the fund manager secures an equivalent or greater amount in cash subscriptions from qualified and institutional clients first. Similarly, foreign fund securities cannot be offered privately to retail investors unless the manager first collects matching cash subscriptions from qualified and institutional clients within Saudi Arabia.
These adjustments aim to reduce risks for retail investors, who previously faced fewer restrictions under a 2021 regulation that allowed individual retail investments up to SR200,000 ($53,245).
The proposed amendments are a vital component of Saudi Arabia’s broader financial market development strategy under Vision 2030. The CMA aims to increase market transparency, enhance investor protection, and boost market participation.
A major goal is to expand assets under management in the financial sector, attract more foreign investment, and enhance the role of institutional investors in the market. By implementing stricter requirements for fund managers before permitting retail subscriptions, the CMA aims to bolster investor protection.
As Saudi Arabia continues to diversify its economy and expand its financial markets, these measures will contribute to a safer and more appealing environment for both local and international investors.
The CMA has emphasized that these proposals will strengthen investor protection by addressing the risks associated with private and foreign funds, which often operate under fewer regulatory constraints than public funds.
Comments can be submitted via the unified electronic platform for public consultation or through the CMA’s official email channels. All feedback will be carefully reviewed before finalizing the regulatory amendments, according to an official release from the authority.
