CMA Seeks Public Input On Investment Funds Regulation Amendment

The Capital Market Authority (CMA) has invited stakeholders in the capital market to provide feedback on the Draft Amendments of Investment Funds Regulations. The consultation period, which lasts for 30 days, aims to allow public funds to subscribe to privately offered debt instruments issued within the Kingdom. This initiative seeks to enhance the asset management industry by broadening the scope of debt instrument issuers available for public fund managers.

The proposed amendments are designed to make the market more attractive to debt instrument issuers and increase the appeal of fund investments in these instruments. By expanding the range of assets available for investment, the CMA hopes to facilitate growth in this sector. To protect investors, the draft stipulates that money market fund managers and capital protection funds can invest no more than 10% of the fund’s net asset value in debt instruments from a single issuer.

This measure aims to mitigate risks and diversify fund portfolios. Additionally, managers of public funds investing in debt instruments will be required to disclose the credit rating of these instruments in their quarterly statements. This requirement is intended to enhance transparency and disclosure levels for investors.

The draft aligns with the CMA’s strategic plan to deepen the debt instruments market and increase its liquidity. This initiative supports the authority's goal of elevating the Saudi market’s status and global ranking, thereby enhancing its attractiveness and efficiency. It also aims to boost regional and international competitiveness.

One of the key objectives includes developing the sukuk and debt instruments market, increasing liquidity in this sector, and growing it to become one of the world’s leading emerging markets. The CMA emphasized that feedback from relevant and interested parties will be fully considered when finalizing the draft.

Opinions and comments can be submitted through the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Center, at: istitlaa.ncc.gov.sa, or via email at: [email protected].

This initiative is part of broader efforts by the CMA to support capital formation as one of its strategic directions. The authority continues to focus on developing regulations that foster a more robust and transparent financial market in Saudi Arabia.

With inputs from SPA