Saudi Arabia: New Regulations Seek To Streamline Financial Market – OpEd

By Dimah Talal Al-Sharif*

In a bid to streamline and manage the Saudi financial market effectively, the Capital Market Authority (CMA) on Monday approved investment funds laws, real estate investment funds regulation and a glossary.

The glossary is a list of terminology used in the CMA’s regulations and documents.

The new regulations will come into effect on May 1.

These new amendments seek to develop the Kingdom’s financial market and support the growth of asset management. The new laws also aim to provide additional sources of financing and refinancing and regulate institutional investment and improve the services provided to potential and existing investors.

The investment fund and real estate investment regulations aim to boost securities business in the Kingdom while ensuring fair competition under the supervision of the CMA.

The latest amendments provide an additional option for investment fund managers to establish a special entity that provides a legal personality to an investment fund while protecting the contractual relationship between the fund’s managers and unit owners.

The new regulations seek to develop the Saudi financial sector in accordance with the best global practices. These amendments will help streamline the procedures for terminating and liquidating public and private investment funds and enabling the offering and listing of real estate investment on the parallel market.

The new regulations also set a framework to allow the purchase of closed-end exchange-traded funds and real estate investment traded funds and selling the treasury units of those funds.

These amendments seek to raise the level of transparency and disclosure in periodic reports of investment funds, unify the time period for disclosing financial statements and annual reports of public investment funds and public real estate investment funds.

The new regulations also enhance the role of board of directors by empowering them to better monitor and supervise the work of fund managers.

• Dimah Talal Alsharif is a Saudi legal consultant, head of the health law department at the law firm of Majed Garoub and a member of the International Association of Lawyers. Twitter: @dimah_alsharif