The Saudi Capital Market Authority (CMA) has invited public feedback on a proposal to introduce “simplified investment funds”, as part of its broader strategy to strengthen the asset management sector and expand investment opportunities for all investor categories.
According to a statement from the CMA, the project aims to establish a flexible regulatory framework for investment funds characterized by lower establishment and management costs and greater structural flexibility. The proposed framework would also simplify the contractual relationship between fund managers and investors, making it easier to meet the diverse investment needs of targeted clients.
The proposal allows for the creation of funds tailored for institutional and qualified investors, with lighter regulatory requirements and reduced financial disclosure obligations.
It forms part of the CMA’s initiatives to boost the attractiveness of Saudi Arabia’s asset management sector and align it with international best practices observed in major global markets.
Key elements of the proposal include limiting fund offerings to specific categories of investors eligible under the CMA’s rules, and removing the requirement to appoint a custodian for funds structured as special purpose entities.
Additionally, the proposal permits the offering of fund units to non-resident foreign investors, the Saudi government, public entities, and government institutions through fund managers holding an international license for securities activities.
The CMA proposes giving fund managers more flexibility regarding the timeline for notifying the authority before launching a fund, provided that notice is submitted prior to the proposed offering date.
If approved, the new framework would allow greater adaptability in defining the contractual relationship between fund managers and unit holders, including fund termination and liquidation terms, investment unit classes, reporting requirements, and procedures for amending fund conditions. This, the CMA noted, is expected to boost the regulatory environment and increase the overall attractiveness of investment funds in the Kingdom.
The CMA added that the proposal complements its earlier project on the international license framework for securities firms, which was opened for public consultation in May 2025. Together, the two initiatives represent a strategic step toward transforming Saudi Arabia’s asset management sector from a domestic market player into a regional and global financial hub.
The Kingdom’s assets under management surged past SAR 1 trillion ($266.6 billion) in 2024, marking 20.9% growth from 2023. Investment funds accounted for over SAR 700 billion ($186.6 billion), a 25.2% increase year-on-year. Private funds represented 75% of total fund assets, while the number of investors jumped 64.9% to reach 152,405 by the end of 2024.
