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The Proposed Development of the Regulatory Framework for Investment Funds in the Kingdom

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Investment Funds Regulations

The Current Provisions

Provisions After Proposed Amendment

Clarification

Article 11: Financial Statements
a. The financial statements for an investment fund must be prepared in Arabic, and in a semi-annual basis at least for public fund and private real estate fund, and must be reviewed in accordance with the accounting standards approved by the Saudi Organisation of Certified Public Accountants. Additional copies may be prepared in other languages, and in the event of any conflict between those copies, the Arabic text shall prevail.

b. The annual financial statements for an investment fund must be audited in accordance with the accounting standards approved by the Saudi Organisation of Certified Public Accountants, and the auditor, through reviewing the annual financial statements and based on the information provided to it, must include in its report what may come to its attention of breaches to the provisions of the Investment Funds Regulations and the Fund's Terms and Conditions.

c. Copies of all financial statements required by Paragraphs (a) and (b) of this Article must be included in the fund reports prepared by the fund manager pursuant to Article (76) of these Regulations in the case of public funds and pursuant to Article (93) of these Regulations in the case of private funds.

Article 11: Financial Statements
a. The financial statements for an investment fund must be prepared in Arabic, and in a semi-annual basis at least for public fund and private real estate fund, Additional copies may be prepared in other languages, and in the event of any conflict between those copies, the Arabic text shall prevail.

b. The interim financial statements for an investment fund must be prepared in accordance with the accounting standards approved by the Saudi Organization for Chartered and Professional Accountants, and must be examined in accordance with the auditing standards approved by the Saudi Organization for Chartered and Professional Accountants.

c. The provisions of Paragraphs (a) and (b) of this Article shall not apply to a public fund whose establishment period is less than three months.

d. The annual financial statements for an investment fund must be prepared in accordance with the accounting standards approved by the Saudi Organization for Chartered and Professional Accountants, and must be audited in accordance with the auditing standards approved by the Saudi Organization for Chartered and Professional Accountants, and the auditor, through reviewing the annual financial statements and based on the information provided to it, must include in its report what may come to its attention of breaches to the provisions of the Investment Funds Regulations and the Fund's Terms and Conditions.

e. Copies of all financial statements required by Paragraphs (a), (b) and (d) of this Article must be included in the fund reports prepared by the Fund Manager pursuant to Article (76) of these Regulations in the case of public funds and pursuant to Article (93) of the Regulations in the case of private funds.

- It is proposed to make a number of drafting amendments to Article (11) of the draft amendment to the Investment Funds Regulations.

- It is proposed to add Paragraph (c) to Article (11) of the draft amendment to the Investment Funds Regulations, stipulating that the preparation of interim financial statements shall not be required for a public fund whose establishment period is less than three months.

Article 12: Register of Unitholders
a. The fund operator must establish a register of unitholders and must maintain it in the Kingdom.

b. The register shall be conclusive evidence as to the persons entitled to units
entered on the register.
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Article 12: Register of Unitholders
a. The Fund Operator must establish a register of unitholders and must maintain it in the Kingdom.

b. The Fund Operator may engage an entity supervised by the Authority, pursuant to a contract in writing to establish and maintain a register of unitholders referred to in Paragraph (a) of this Article.

c. Notwithstanding the appointment of another entity supervised by the Authority, the Fund Operator shall remain responsible for the discharge of all its duties in relation to the register under these Regulations.

d. The register shall be conclusive evidence as to the persons entitled to units entered on the register.
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It is proposed add Paragraphs (b) and (c) to Article (12) of the draft amendment to the Investment Funds Regulations, to allow the fund operator to delegate an entity subject to the Authority's supervision to prepare and maintain a register of unitholders and to state the fund operator's responsibility for performing its duties with regards to the register of unitholders, similar to the provisions of Article (37) of the Real Estate Investment Funds Regulations.

Article 17: Delegation by the Fund Manager
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g. The delegation referenced in Paragraph (e) of this Article must be made pursuant to a contract in writing, and where the distributor is a local bank it must include the following controls at minimum:
1) That the units of the publicly offered investment funds shall be distributed through the distributer's website only.
2) The website of the delegated distributor provides the ability to fill and sign the required documents, including:
a) The fund manager's investment account opening agreement.
b) The “Know Your Client" form provided in the Capital Market Institutions Regulations.
c) The fund's subscription form, and the Fund's Terms and Conditions in which a client wishes to participate.

h. Where the fund manager has delegated the distributor under Paragraph (e) of this Article, the fund manager is responsible for complying with the Capital Market Law and its Implementing Regulations, and the Anti-Money Laundering Law, and its Implementing Regulations. The fund manager may rely on the delegated distributor to take due diligence measures towards the client according to the relevant provisions contained in the Anti-Money Laundering Law and its Implementing Regulations.
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Article 17: Delegation by the Fund Manager
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f. The distributor that has been delegated in the Kingdom pursuant to Paragraph (e) of this Article, must be one of the following:
1) a capital market institution licensed to carry out dealing activity.
2) a capital market institution licensed to carry out advising activity.
3) a local bank.
4) Investment Fund Distribution Platform.
5) a Company licensed by the Saudi Central Bank to provide electronic wallet services.

g. The delegation referenced in Paragraph (e) of this Article must be made pursuant to a contract in writing, and where the distributor is a local bank or a Company licensed by the Saudi Central Bank to provide electronic wallet services.it must include the following controls at minimum:
1) That the units of the publicly offered investment funds shall be distributed through the distributer's website or application only.
2) The website or application of the delegated distributor provides the ability to fill and sign the required documents, including:
a) The fund manager's investment account opening agreement.
b) The “Know Your Client" form provided in the Capital Market Institutions Regulations.
c) The fund's subscription form, and the Fund's Terms and Conditions in which a client wishes to participate.

It
- It is proposed to add Subparagraphs (4) and (5) to Paragraph (f) of Article (17) of the draft amendment to the Investment Funds Regulations, to enable the distribution of investment funds units through an investment fund distribution platform and a Company licensed by the Saudi Central Bank to provide electronic wallet services.

-It is proposed to amend Paragraph (g) of Article (17) of the draft amendment to the Investment Funds Regulations, by adding the phrase “or a Company licensed by the Saudi Central Bank to provide electronic wallet services. and to amend Subparagraphs (1) and (2) of paragraph (g) of this Article by adding the phrase “or application".

Article 19: Services, Commissions and Management Fees
Any fees, commissions or charges levied on the fund for its management must be on arm's length terms (and at least equivalent to the terms entered into by persons dealing independently) and in no event shall such charges exceed the limit specified in the Fund's Terms and Conditions.

Article 19: Services, Commissions and Management Fees
a. Any fees, commissions or charges levied on the fund for its management must be on arm's length terms (and at least equivalent to the terms entered into by persons dealing independently) and in no event shall such charges exceed the limit specified in the Fund's Terms and Conditions.
‌b. The Authority may impose a cap for any of the service fees, commissions and charges levied by the public Fund Manager.

It is proposed to add Paragraph (b) to Article (19) of the draft amendment to the Investment Funds Regulations, similar to Paragraph (c) of Article (22) of the Real Estate Investment Funds Regulations.

Article 20: Power of the Authority to Remove and Replace Fund Manager
a. The Authority shall have the power to remove a fund manager in relation to a particular investment fund and to take any action it deems appropriate to appoint a replacement fund manager for that investment fund or to take any other measures it deems necessary in the event of:
1) the fund manager ceasing to carry out managing investments and operating funds activity or managing investments activity without notification to the Authority under the Capital Market Institutions Regulations;
2) the cancellation, withdrawal or suspension by the Authority of the fund manager's authorisation(s) to carry out managing investments and operating funds activity or managing investments activity under the Capital Market Institutions Regulations;
3) a request by the fund manager to the Authority to cancel its relevant authorisation to carry out managing investments and operating funds activity or managing investments activity;
4) the Authority believing that the fund manager has failed, in a manner which the Authority considers material, to comply with the Capital Market Law or its Implementing Regulations;
5) the death, incapacity or resignation of a portfolio manager who manages the assets of the investment fund, if no other registered person employed by the fund manager can manage the assets of the relevant investment fund or the assets of the funds managed by the portfolio manager;
6) the issuance of a special fund resolution by unitholders of a close ended fund requesting the Authority of removal of the fund manager; or
7) any other event determined by the Authority on reasonable grounds to be of sufficient material.

b. Notice of any event described in Subparagraph (5) of Paragraph (a) of this Article must be provided by the fund manager to the Authority within (2) days from the date of its occurrence.

c. Upon removal of the fund manager in accordance with the cases stipulated in Subparagraphs (1), (2), (3), (4), (5) and (7) of Paragraph (a) of this Article, the Authority shall directs the removed fund manager to call for a unitholders meeting within (15) days from the date of the Authority's removal decision, in order to appoint the custodian or other party, through an ordinary fund resolution, to find and negotiate with a replacement fund manager and specify the time limit for finding and negotiation.

d. Upon removal of the fund manager in accordance with the case stipulated in Subparagraph (6) of Paragraph (a) of this Article, the fund manager must issue an ordinary fund resolution at the same meeting in which unitholders voted on the request to remove the fund manager, in order to appoint the custodian or other party, to find and negotiate with a replacement fund manager and specify the time limit for finding and negotiation.

e. When any of the two cases stipulated in Paragraphs (c) and (d) of this Article occurs, the fund manager must notify the Authority of the results of the unitholders meeting within two days of its convening date.

f. The fund manager must cooperate and provide the custodian or the party assigned to find and negotiate any documents required by it for the purpose of appointing a replacement fund manager within (10) days from the date of the request, and both parties must maintain the confidentiality of the information.

g. The fund manager must, upon approval of the replacement fund manager to manage the fund and transfer of the fund management to it, send a written consent of the replacement fund manager to the Authority as soon as it is received.

h. If the Authority exercises any of its powers pursuant to Paragraph (a) of this Article, the relevant fund manager shall co‑operate fully in order to help facilitate a smooth transfer of responsibilities to the replacement fund manager during the initial (60) days period after the appointment of the replacement fund manager. The fund manager shall where necessary and applicable and at the discretion of the Authority, novate all of the contracts relating to the relevant investment fund to which it is a party to the replacement fund manager.

i. In case a replacement fund manager has not been appointed within the time limit for finding and negotiation with a replacement fund manager referred to in Paragraphs (c) and (d) of this Article, unitholders are entitled to request the liquidation of the fund through a special fund resolution.

Article 20: Power of the Authority to Remove and Replace Fund Manager
a. The Authority shall have the power to remove a fund manager in relation to a particular investment fund and to take any action it deems appropriate to appoint a replacement fund manager for that investment fund or to take any other measures it deems necessary in the event of:
1) the fund manager ceasing to carry out managing investments and operating funds activity or managing investments activity without notification to the Authority under the Capital Market Institutions Regulations;
2) the cancellation, withdrawal or suspension by the Authority of the fund manager's authorisation(s) to carry out managing investments and operating funds activity or managing investments activity under the Capital Market Institutions Regulations;
3) a request by the fund manager to the Authority to cancel its relevant authorisation to carry out managing investments and operating funds activity or managing investments activity;
4) the Authority believing that the fund manager has failed, in a manner which the Authority considers material, to comply with the Capital Market Law or its Implementing Regulations;
5) the death, incapacity or resignation of a portfolio manager who manages the assets of the investment fund, if no other registered person employed by the fund manager can manage the assets of the relevant investment fund or the assets of the funds managed by the portfolio manager;
6) the issuance of a special fund resolution by unitholders of a close ended fund requesting the Authority of removal of the fund manager; or
7) any other event determined by the Authority on reasonable grounds to be of sufficient material.

‌b. Notice of any event described in Subparagraph (5) of Paragraph (a) of this Article must be provided by the fund manager to the Authority within (2) days from the date of its occurrence.

‌c. For removal of the Fund Manager in accordance with the cases stipulated in Subparagraphs (1), (2), (3), (4), (5) and (7) of Paragraph (a) of this Article, the Authority shall directs the Fund Manager to call for a unitholders meeting within (15) days, in order to appoint the custodian or any other party, through an ordinary fund resolution, to find and negotiate with a replacement Fund Manager and specify the time limit for finding and negotiation.

d. For removal of the fund manager in accordance with the case stipulated in Subparagraph (6) of Paragraph (a) of this Article, the fund manager must issue an ordinary fund resolution at the same meeting in which unitholders voted on the request to remove the fund manager, in order to appoint the custodian or any other party, to find and negotiate with a replacement fund manager and specify the time limit for finding and negotiation.

‌e. When any of the two cases stipulated in Paragraphs (c) and (d) of this Article occurs, the fund manager must notify the Authority of the results of the unitholders meeting within two days of its convening date.

‌f. The fund manager must cooperate and provide the custodian or the party assigned to find and negotiate any documents required by it for the purpose of appointing a replacement fund manager within (10) days from the date of the request, and both parties must maintain the confidentiality of the information.

‌g. The fund manager must, upon approval of the replacement fund manager to manage the fund and transfer of the fund management to it, send a written consent of the replacement fund manager to the Authority as soon as it is received.

i. The removed Fund Manager must not charge management fees or any other fees starting from the date of the Authority's decision to remove him.
j. In case a replacement Fund Manager has not been appointed within the time limit for finding and negotiation with a replacement Fund Manager referred to in Paragraphs (c) and (d) of this Article, unitholders are entitled to request the liquidation of the fund through a special fund resolution.
...

- It is proposed to amend Paragraph (c) of Article (20) of the draft amendment to the Investment Funds Regulations, by deleting the phrase “from the date of the Authority's removal decision"

- It is proposed to amend Paragraph (c) of Article (20) of the draft amendment to the Investment Funds Regulations, to provide further clarification regarding the sequence of procedures. Additionally, the word “any" has been added to the phrase “other party".

- It is proposed to amend the phrases contained in Paragraph (d) of Article (20) of the draft amendment to the Investment Funds Regulations, by adding the word “any" before the phrase “other party".

- It is proposed to add Paragraph (i) to Article (20) of the draft amendment to the Investment Funds Regulations, to clarify that Fund Managers are not entitled to any management fees starting from the date of the authority's decision to remove them.

Article 21: The Voluntary Withdrawal of the Fund Manager
a. If the Fund Manager wishes to voluntarily withdraw from managing the fund, the following requirements must be fulfilled:
1) Obtaining the approval of the unitholders of the relevant fund to replace the Fund Manager and appoint a replacement Fund Manager through an ordinary fund resolution.
2) Obtaining the approval of the replacement Fund Manager to manage the relevant fund.
3) Obtaining the Authority's approval.

b. The voluntarily withdrawing Fund Manager must transfer the responsibilities of managing the relevant fund to the replacement Fund Manager within (60) days from the issuance of the Authority's approval. The withdrawing Fund Manager shall, where necessary and applicable, transfer to the replacement Fund Manager all contracts related to the relevant investment fund.

It is proposed to add Article (21) to the draft amendment to the Investment Funds Regulations, to regulate the provisions of the voluntary withdrawal of the Fund Manager.

Article 22: Termination and Liquidation of the Fund
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e. The fund manager must notify the Authority and the unitholders, in writing, of the details of the plan and procedures for the fund termination at least (21) days prior to the intended date for terminating the fund, without prejudice to the Fund's Terms and Conditions.
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i. In the event of expiry of the fund's term and the fund manager has not completed the sale of the fund's assets before the expiry of its term, the fund manager must liquidate the assets and distribute the unitholders' dues among them within a period not exceeding (6) months from the date of the expiry of the fund's term.
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m. The fund manager must treat all unitholders equally during the fund termination or liquidation process.
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Article 22: Termination and Liquidation of the Fund
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e. The open-ended Fund Manager must notify the Authority and the unitholders, in writing, of the details of the plan and procedures for the fund termination at least (21) days prior to the intended date for terminating the fund, without prejudice to the Fund's Terms and Conditions.
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i. In the event of expiry of the fund's term and the Fund Manager has not completed the sale of the fund's assets before the expiry of its term, the Fund Manager must liquidate the assets and distribute the unitholders' dues among them within a period not exceeding (12) months from the date of the expiry of the fund's term.
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m. The Fund Manager must treat all unitholders equally during the fund termination or liquidation process, and must take their interests into consideration in accordance with the provisions of the Capital Market Law and its Implementing Regulations.
n. The Fund Manager is not permitted to charge management fees during the liquidation period of the fund.
...

- It is proposed to amend Paragraph (e) of Article (22) of the draft amendments of the Investment Funds Regulations, by adding the word “open-ended", so that the requirement mentioned in the referenced Paragraph applies to open-ended Fund Managers.

- It is proposed to amend the mandatory liquidation period stated in Paragraph (i) of Article (22) of the draft amendments of the Investment Funds Regulations, by extending it to 12 months instead of 6 months.

- It is proposed to amend Paragraph (m) of Article (22) of the draft amendment to the Investment Funds Regulations, to emphasize the importance of the Fund Manager taking into account the interests of all unitholders during the fund's termination or liquidation process in accordance with the provisions of the Capital Market Law and its Implementing Regulations.

- It is proposed to add Paragraph (n) to Article (22) of the draft amendment to the Investment Funds Regulations, to clarify that the Fund Manager does not charge management fees during the liquidation period of the fund.

Article 42: The fund's benchmark
The Fund Manager must select a benchmark that represents an appropriate standard for measuring the fund's performance. The benchmark must reflect the fund's strategies and investment objectives, and must be issued by an entity independent from the Fund Manager.

It is proposed to add Article (42) to the draft amendment to the Investment Funds Regulations, requiring the Fund Manager to select a benchmark that serves as a appropriate standard for measuring the fund's performance, provided that the benchmark is issued by an entity independent from the Fund Manager.

Article 44: Real Estate Investment Fund
a. Public real estate investment funds shall be subject to the Real Estate Investment Funds Regulations not these Regulations.
b. Real estate investment funds, whose units are offered for private placement, shall be subject to the relevant provisions of these Regulations, and shall not be subject to the Real Estate Investment Funds Regulations.

Article 44: Real Estate Investment Fund
a. Public real estate investment funds shall be subject to the Real Estate Investment Funds Regulations not these Regulations, unless stated otherwise in the Real Estate Investment Funds Regulation.
b. Real estate investment funds, whose units are offered for private placement, shall be subject to the relevant provisions of these Regulations, and shall not be subject to the Real Estate Investment Funds Regulations.

It is proposed to amend Paragraph (a) of Article (44) of the draft amendment to the Investment Funds Regulations in light of the amendment to Paragraph (b) of Article (36) in the draft amendment to the Real Estate Investment Funds Regulations.

Article 47: Closed-Ended Investment Traded Fund
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d. The fund's total assets value may increase by accepting cash contributions or in-kind contributions, or both, through the following mechanism:
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4. In the event that the value of the units to be offered has been collected, the offered units must be first allocated to the unitholders registered on the day of the unitholders' meeting, then allocate the remaining units (if any) to the remaining subscribers, within a period not exceeding (15) days after the end of the offering period, which is set out in the Fund's Terms and Conditions. The ownership of the in-kind contributions that is to be acquired must be transferred for the interest of the fund, and the new units shall be listed on the Exchange within a period not exceeding (60) days from the end of the offering period. It is not permissible to dispose of the units allocated to subscribers by in-kind contributions of (5%) or more through the process of increasing the fund's total assets value in accordance with Paragraph (d) of this Article within the first year of their trading commencement.

5. where the fund's total assets value increase is made through accepting in-kind contributions, the additional units shall be allocated to the subscribers by in-kind contributions immediately after obtaining the unitholders' approval referred to in Subparagraph (2) of Paragraph (d) of this Article, provided that the ownership of the in-kind contribution to be acquired is transferred for the interest of the fund, and the new units are listed on the Exchange within a period not exceeding (60) days after the end of the offering period. It is not permissible to dispose the units allocated to subscribers by in-kind contributions of (5%) or more through the process of increasing the fund's total assets value in accordance with Paragraph (d) of this Article within the first year of their trading commencement.

Article 47: Closed-Ended Investment Traded Fund
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d. The fund's total assets value may increase by accepting cash contributions or in-kind contributions, or both, through the following mechanism:
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4. In the event that the value of the units to be offered has been collected, the offered units must be first allocated to the unitholders registered on the day of the unitholders' meeting, then allocate the remaining units (if any) to the remaining subscribers, within a period not exceeding (15) days after the end of the offering period, which is set out in the Fund's Terms and Conditions. The ownership of the in-kind contributions that is to be acquired must be transferred for the interest of the fund, and the new units shall be listed on the Exchange within a period not exceeding (60) days from the end of the offering period. It is not permissible to dispose of the units allocated to subscribers by in-kind contributions through the process of increasing the fund's total assets value in accordance with Paragraph (d) of this Article within the first year of their trading commencement.

5. where the fund's total assets value increase is made through accepting in-kind contributions, the additional units shall be allocated to the subscribers by in-kind contributions immediately after obtaining the unitholders' approval referred to in Subparagraph (2) of Paragraph (d) of this Article, provided that the ownership of the in-kind contribution to be acquired is transferred for the interest of the fund, and the new units are listed on the Exchange within a period not exceeding (60) days after the end of the offering period. It is not permissible to dispose the units allocated to subscribers by in-kind contributions through the process of increasing the fund's total assets value in accordance with Paragraph (d) of this Article within the first year of their trading commencement.

It is proposed to amend Article (47) of the draft amendment to the Investment Funds Regulations.

Article 50: Offer Requirements for Closed-Ended Investment Traded Fund
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d. When submitting an application for offering, the fund manager must provide the Authority with the names of two receiving agents, at least.

Article 50: Offer Requirements for Closed-Ended Investment Traded Fund
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d. When submitting an application for offering, the Fund Manager must provide the Authority with the name of one receiving agent, at least.

It is proposed to amend Paragraph (d) of Article (50) of the draft amendment to investment funds regulations, by replacing the phrase “names of two receiving agents" with the phrase “name of one receiving agent".

Article 54: Money Market Fund
a. A money market fund manager must invest the fund's assets and money only in the following types of investments:
1) Money market transactions concluded with a party regulated by the Saudi Central Bank or an equivalent regulator to the Saudi Central Bank in a jurisdiction outside the Kingdom.
2) Debt instruments.
3) Derivatives.
4) Bank deposits with institutions regulated by the Saudi Central Bank or equivalent regulator to the Saudi Central Bank in a jurisdiction outside the Kingdom.
5) Units of money market funds with a similar strategy.
6) Units of debt instruments funds with fixed income.
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Article 54: Money Market Fund
a. A money market fund manager must invest the fund's assets and money only in the following types of investments:
1) Money market transactions concluded with a party regulated by the Saudi Central Bank or an equivalent regulator to the Saudi Central Bank in a jurisdiction outside the Kingdom.
2) Debt instruments.
3) Derivatives.
4) Bank deposits with institutions regulated by the Saudi Central Bank or equivalent regulator to the Saudi Central Bank in a jurisdiction outside the Kingdom.
5) Units of public money market funds with a similar strategy.
6) Units of public debt instruments funds with fixed income.
...

It is proposed to amend Subparagraphs (5) and (6) of Paragraph (a) of Article (54) of the draft amendment to the Investment Funds Regulations, by adding the word “public", so that investments by money market funds managers are limited to units of public money market funds with similar strategies, and units of public debt instruments funds with fixed income.

Article 55: Feeder Fund
a. A public fund which is a feeder fund may not invest in another feeder fund.

b. A public fund which is a feeder fund may not invest in more than one investment fund.

Article 55: Feeder Fund
a. A public fund which is a feeder fund may not invest in another feeder fund, or in a private investment fund.

b. A public fund which is a feeder fund may not invest in more than one investment fund.

It is proposed to add the phrase "or in a private investment fund." to Paragraph (a) of Article (55) of the draft amendment to the Investment Funds Regulations.

Article 57: Capital Protected Fund
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b. All investments of the capital protected fund must be consistent with the investment objectives of the fund for the protection of the capital invested by the unitholders and to returning their capital to them in a predetermined future date.
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Article 57: Capital Protected Fund
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b. investments of the capital protected fund must be consistent with the investment objectives of the fund for the protection of the capital invested by the unitholders.

...

It is proposed to amend Paragraph (b) of Article (57) of the draft amendment to the Investment Funds Regulations, by deleting the word “All", and the phrase “and to returning their capital to them in a predetermined future date".

Article 75: Meetings of Unitholders
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d. The fund manager shall call for a meeting of unitholders by announcing it on its website and any other website available to the public according to the controls set out by the Authority, and by sending a notice in writing to all unitholders and the custodian giving not less than (10) days' prior notice of the meeting and not more than (21) days' notice before the meeting. The announcement and notice must specify the date, place, time and agenda of the meeting and the resolutions proposed. The fund manager must at the same time as sending a notice to unitholders convening any meeting of unitholders also send a copy of any such notice to the Authority.
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Article 75: Meetings of Unitholders
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d. The Fund Manager shall call for a meeting of unitholders by announcing it on its website and any other website available to the public according to the controls set out by the Authority, and by sending a notice in writing to all unitholders and the custodian giving not less than (10) days' prior notice of the meeting and not more than (21) days' notice before the meeting. The announcement and notice must specify the date, place, time and agenda of the meeting and the resolutions proposed. The Fund Manager must at the same time as sending a notice to unitholders convening any meeting of unitholders also send a copy of any such notice to the Authority.
e. Unitholders must be provided access, through the Fund Manager 's website and any other publicly accessible website in accordance with the controls set out by the Authority, to the necessary information and documents related to the agenda items when the call to the unitholders' meeting is published, to enable them to make an informed decision.
…

It is proposed to add Paragraph (e) to Article 75 of the draft amendment to the Investment Funds Regulations, to clarify the requirement that unitholders must be provided access, through the Fund Manager's website and any other publicly accessible website in accordance with the controls set by the Authority, to the necessary information and documents related to the agenda items when the call to the unitholders' meeting is published, to enable them to make an informed decision on such items

Article 81: Private Placement Requirements
a. A capital market institution may not offer units in a private fund unless the following fulfilled:

1) notifies the Authority in writing in accordance with the format set out in Annex (6) of these Regulations at least (15) days prior to the proposed date of an offer;

2) submits to the Authority a declaration in accordance with the terms set out in Annex (7) of these Regulations;

3) submits to the Authority copies of the Fund's Terms and Conditions in accordance with the requirements of Annex (11) of these Regulations and any offering documents to be used in advertising the offer; and

4) provide details of the organizational structure of the Fund Manager, including a description of the investment decision-making process of fund manager or sub-fund manager, and the name and function of any registered person in that decision-making process to the Authority.

5) provide a compliance monitoring program for the relevant investment fund.

6) pays such registration fees as the Authority may prescribe.

7) any other information that the Authority requires.

b. If having received a private placement notification and the relevant information and documents provided under Paragraph (a) of this Article the Authority considers that the proposed offer of units may not be commensurate with the fund manager's ability or may result in a breach of the Capital Market Law or its Implementing Regulations, then it may take the following actions:

1) carry out any enquiries which it considered appropriate including requiring the concerned person or its representative to appear before the Authority to answer the questions of the Authority and to explain any matters that the Authority considers relevant to the private placement offering; or

2) require the concerned person or others to provide additional information or to confirm, in such manner as the Authority may specify, that the information provided is accurate.

c. Where the Authority determines that the private placement may not be commensurate with the fund manager's ability or may result in a breach of the Capital Market Law or its Implementing Regulations, the Authority may issue a “notification" to the capital market institution stating that the private offer is not to be made or publish a “Notice" prohibiting the offer.

d. Where the Authority has not taken any actions stated in Paragraph (c) of this Article, the Authority shall, at the request of the capital market institution, issue a notice stating it has no objection to offering units in the private fund.

e. The capital market institution must provide the Authority within (10) days of the end of the offer period of the private fund with the results of the offer, in the form set out in Annex (10) of these Regulations.

f. Where the offer is not completed by the proposed offer end date (if any) specified in the private placement notification provided to the Authority in accordance with Subparagraph (1) of Paragraph (a) of this Article and of the Fund's Terms and Conditions, the capital market institution must provide the Authority within (10) days with a notification in writing signed by the capital market institution confirming that the offer has failed to complete. The capital market institution must return to the unitholders their full subscriptions monies together with any returns generated from investing the subscriptions monies without any deduction.

‌ Article 81: Private Placement Requirements
a. A capital market institution may not offer units in a private fund unless the following fulfilled:

1) notifies the Authority in writing in accordance with the format set out in Annex (6) of these Regulations at least (15) days prior to the proposed date of an offer;

2) submits to the Authority a declaration in accordance with the terms set out in Annex (7) of these Regulations;

5) provide a compliance monitoring program for the relevant investment fund.

6) pays such registration fees as the Authority may prescribe.

7) any other information that the Authority requires.

2) require the concerned person or others to provide additional information or to confirm, in such manner as the Authority may specify, that the information provided is accurate.

g. If the Fund Manager terminates the fund before its operation or cancels its offering after the offering is completed by collecting the minimum limit specified in the fund's terms and conditions by the proposed offer's expiry date (if any), stated in the private offer notification submitted to the Authority in accordance with subparagraph (1) of Paragraph (a) of this Article, the capital market institution must provide the Authority with a written notification, signed by the institution, within (10) days confirming the termination of the fund before its operation or cancels its offering after the offering is completed. Additionally, subscription monies and any returns generated from their investment must be refunded to the unitholders without any deductions.

h. The Fund Manager must notify the Authority immediately upon the commencement of the Fund's operation.

i. The subscriber has the right to refund the subscription monies and any returns generated from their investment without any deductions if the fund is not operated and the Fund Manager terminates the fund or cancels its offering.

j. The subscriber has the right to recover the subscription monies and any returns generated from their investment without any deductions if any of the following events occur before the fund is activated:
1) The offering period of the private fund is extended beyond the extension period specified in the fund's terms and conditions.
2) The fund's capital or minimum operating is modified.
3) A material change is made to the fund's terms and conditions.

- It is proposed to add Paragraph (g) to Article (81) of the draft amendment to the Investment Funds Regulations.

- It is proposed to add Paragraph (h) to Article (81) of the draft amendment to the Investment Funds Regulations, to clarify that the capital market institution must notify the Authority immediately upon the fund's activation.

- It is proposed to add Paragraph (i) to Article (81) of the draft amendment to the Investment Funds Regulations, requiring the Fund Manager to return subscription amounts and any returns generated from their investment without any deductions if the fund is not operational, and the Fund Manager terminates the fund or cancels its offering.

- It is proposed to add Paragraph (j) to Article (81) of the draft amendment to the Investment Funds Regulations, granting the unitholders the right to recover the subscription amounts and any returns generated from their investment in the event of any of the events outlined in the referenced Paragraph occurring.

Article 86: General Rules and Restrictions
a. The investments of a private fund may consist of assets of any types and descriptions; however, the fund manager must clearly state the permitted investments together with the investment objective, investment policies and any investment restrictions or limitations in the Fund's Terms and Conditions and in the offering documents of the relevant private fund.

b. The fund manager must comply at all times with the Fund's Terms and Conditions, the offering documents, investment objective, investment policies and any investment restrictions or limitations of the relevant private fund.
c. The fund manager must disclose all payments out of assets of the fund in the Terms and Conditions.
d. The fund manager must disclose all expenses of offering the units of a private investment fund if it's incurred by the fund in the Fund's Terms and Conditions.

Article 86: General Rules and Restrictions
a. The investments of a private fund may consist of assets of any types and descriptions; however, the Fund Manager must clearly state the permitted investments together with the investment objective, investment policies and any investment restrictions or limitations in the Fund's Terms and Conditions and in the offering documents of the relevant private fund.

b. If the private fund is a venture capital fund, its objective must be to invest no less than (70%) of the total value of its assets in any of the following:
1) Unlisted emerging companies with high opportunities for growth and expansion and which have not been established for more than ten years, at the time of the fund's initial investment in those companies.
2) venture capital funds with a similar strategy.
c. The fund manager must comply at all times with the Fund's Terms and Conditions, the offering documents, investment objective, investment policies and any investment restrictions or limitations of the relevant private fund.
d. The fund manager must disclose all payments out of assets of the fund in the Terms and Conditions.

e. The fund manager must disclose all expenses of offering the units of a private investment fund if it's incurred by the fund in the Fund's Terms and Conditions.

It is proposed to add Paragraph (b) to Article (86) of the draft amendment to the Investment Funds Regulations, for the purpose of organizing the regulatory framework of the venture capital fund for investors.

Article 90: Valuation
...

d. A Fund Manager of a private real estate fund must, before purchasing or selling any real estate assets, obtain valuation from at least two accredited valuers.
...
g. In the case of a one investment goals of the fund includes Initial development or structural development, the fund manager of a private real estate fund must appoint a developer, and an engineering office that is independent of any of the relevant parties, after ensuring that they have obtained the necessary approvals and licenses to carry out their business and activities from the relevant governmental bodies, and the engineering office shall – at least- oversee the implementation of the Fund's business plan, and the approval of disbursements to the developer and contractor.
…

Article 90: Valuation
...

d. A Fund Manager of a private real estate fund must, before purchasing or selling any real estate assets, obtain valuation from at least two accredited valuers.
...

‌g. In the case of a one investment goals of the fund includes Initial development or structural development, the fund manager of a private real estate fund must appoint one or more developers -provided that the duties and responsibilities of each developer are clearly specified in the fund's terms and conditions-, and an engineering office that is independent of any of the relevant parties, after ensuring that they have obtained the necessary approvals and licenses to carry out their business and activities from the relevant governmental bodies, and the engineering office shall – at least- oversee the implementation of the Fund's business plan, and the approval of disbursements to the developer and contractor.
…

It is proposed to amend Paragraph (g) of Article (90) of the draft amendment to the Investment Funds Regulations, to clarify that the Fund Manager may appoint more than one developer, provided that the duties and responsibilities of each developer are clearly specified in the fund's terms and conditions.

Article 91: Meetings of Unitholders
...

e. The fund manager shall call for a meeting of unitholders by sending a written notice to all unitholders and the custodian by giving not less than (10) days' prior notice of the meeting and not more than (21) days' notice before the meeting. The notice must specify the date, place, time and agenda of the meeting and the resolution proposed. The fund manager must at the same time as sending a notice to unitholders convening any meeting of unitholders also send a copy of any such notice to the Authority.

f. The fund manager must immediately notify the Authority of all resolutions issued in the unitholders' meetings.
...

Article 91: Meetings of Unitholders
...

f. The Fund Manager shall provide unitholders with access to all required information and documents related to agenda items, to enable unitholders to make informed decision.

g. The fund manager must immediately notify the Authority of all resolutions issued in the unitholders' meetings.
...

It is proposed to add Paragraph (f) to Article (91) of The Draft Amendments of Investment Funds Regulations, stipulating that The Fund Manager shall provide unitholders with access to all required information and documents related to agenda items, to enable unitholders to make informed decision.

PART 6:

FOREIGN FUNDS

Article 97: Offer of Securities Issued by a Foreign Fund in the Kingdom

a. Securities issued by a foreign fund may not be offered in the Kingdom except in accordance with this Part.

b. No person may offer securities issued by a foreign fund in the Kingdom unless the offer is being made through a distributor and the offering of securities shall be a private placement in accordance with the requirements set out in Article (99) of these Regulations.

c. The distributer referred to in Paragraph (b) of this Article, must be a capital market institution licensed to carry out dealing activity or the activity of managing investments and operating funds.

d. A foreign offered fund manager must be authorised in a jurisdiction that employs regulatory standards and requirements at least equivalent to those of the Authority. The Authority shall have the discretion to assess whether the jurisdiction has regulatory standards and requirements at least equivalent to those of the Authority.

PART 6:

FOREIGN FUNDS

Article 97: Offer of Securities Issued by a Foreign Fund in the Kingdom

a. Securities issued by a foreign fund may not be offered in the Kingdom except in accordance with this Part.

c. The distributer referred to in Paragraph (b) of this Article, must be one of the following:
1) A capital market institution licensed to carry out dealing activity.
2) A capital market institution licensed to carry out the activity of managing investments and operating funds.
3) A capital market institution licensed to carry out the activity of managing investments, provided that such foreign fund intended to be distributed and whose securities are to be offered in the Kingdom is established by such institution, and foreign investors own no less than 50% of the total value of the fund's units.

d. The financial market institution referred to in Sub-Paragraph (3) under Paragraph (c) of this Article shall not be subjected to Sub-Paragraph (4) under Paragraph (a) of Article (99) herein, nor to Paragraphs (4) and (5) of Article (103) herein.

e. A foreign offered Fund Manager must be authorized in a jurisdiction that employs regulatory standards and requirements at least equivalent to those of the Authority. The Authority shall have the discretion to assess whether the jurisdiction has regulatory standards and requirements at least equivalent to those of the Authority.

It is proposed to amend Paragraph (c) of Article (97) and to add a new Paragraph (d) of Article (97) of The Draft Amendments of Investment Funds Regulations, in order to enable capital market institutions, licensed to carry out the activity of managing investments, to distribute foreign funds and offer their securities in the Kingdom, provided that such foreign funds are established by such institutions and foreign investors own no less than 50% of total value of the fund's units.

Article 102: Power of the Authority to Suspend a Distributor
The Authority shall have the power to suspend a distributor in relation to a particular foreign fund or to take any other measures it deems necessary in the event of:
1) the distributor ceasing to carry out activities of dealing or the activity of managing investments and operating funds without notification to the Authority under the Capital Market Institutions Regulations;
...

Article 102: Power of the Authority to Suspend a Distributor
The Authority shall have the power to suspend a distributor in relation to a particular foreign fund or to take any other measures it deems necessary in the event of:
1) the distributor ceasing to carry out activities of dealing or the activity of managing investments and operating funds or the activity of managing investments without notification to the Authority under the Capital Market Institutions Regulations;
...

It is proposed to amend Paragraph (1) of Article (102) of The Draft Amendments of Investment Funds Regulations, reflecting the proposed amendments to Article (97) of the same draft, which seek to enable capital market institutions licensed to carry out the activity of managing investments to distribute foreign funds and offer their securities in the Kingdom.

Article 103: Distributor Responsibilities

The distributor of securities issued by a foreign fund must comply with the followings:

1) Sending all reports and documentation issued by the foreign fund manager to the securities holders in the Kingdom. And ensuring that all securities holders within the Kingdom in a foreign fund shall be directly entitled to the rights prescribed in the fund documentation.
2) Notifying all securities holders in writing of all fundamental changes related to the foreign fund.
3) Conveying all requests and letters of securities holders within the Kingdom to the foreign fund manager.
4) Notifying the securities holder in the kingdom (90) days prior to the termination of the relationship with the foreign open-ended fund manager.
5) Taking all appropriate actions to ensure continuity of relationship with the manager of the closed-ended foreign fund until the end of the fund's term.

Article 103: Distributor Responsibilities

The distributor of securities issued by a foreign fund must comply with the followings:

1) Sending all reports and documentation issued by the foreign Fund Manager to the securities holders in the Kingdom. And ensuring that all securities holders within the Kingdom in a foreign fund shall be directly entitled to the rights prescribed in the fund documentation.
2) Notifying all securities holders in writing of all fundamental changes related to the foreign fund.
3) Conveying all requests and letters of securities holders within the Kingdom to the foreign Fund Manager.
4) Notifying the securities holder in the kingdom (90) days prior to the termination of the relationship with the foreign open-ended Fund Manager.
5) Taking all appropriate actions to ensure continuity of relationship with the manager of the closed-ended foreign fund until the end of the fund's term.

6) Notifying the Authority and the securities holders, in writing, of the fund's termination within (10) days from the end of the fund term in accordance with the requirements in Paragraph (d) of Annex (10) of these Regulations.

It is proposed to add Paragraph (“6") to Article (103) of The Draft Amendments of Investment Funds Regulations, obligating the distributor of securities issued by a foreign fund to notify the Authority and securities holders, in writing, of the fund's termination.

PART 8:
INVESTMENT FUNDS THAT TAKE THE FORM OF A SPECIAL PURPOSE ENTITY

Article 108: General Provisions
a. Investment funds that take the form of a special purpose entity shall be subject to all the provisions of these Regulations and the Rules for Special Purposes Entities, unless these Regulations states otherwise.

b. To establish an investment fund that takes the form of a special purpose entity, the fund manager must satisfy the requirements to establish a special purposes entity in accordance with the provisions contained in the Rules for Special Purposes Entities, and the provisions contained in these regulations, as applicable.

c. For the purposes of this Part, any reference to the “investment fund" in these Regulation or the Capital Market Law and its Implementing Regulations, applies to the investment fund that takes the form of a special purpose entity.

PART 8:
INVESTMENT FUNDS THAT TAKE THE FORM OF A SPECIAL PURPOSE ENTITY

Article 108: General Provisions
a. Investment funds that take the form of a special purpose entity shall be subject to all the provisions of these Regulations and the Rules for Special purposes Entities, unless these Regulations states otherwise

b. To establish an investment fund that takes the form of a special purpose entity, the Fund Manager must satisfy the requirements to establish a special purpose entity in accordance with the provisions contained in the Rules for Special purposes Entities, and the provisions contained in these regulations, as applicable.

c. ‌The Manager of Investment Funds that take the form of a special purpose entity must have the by-laws certified by the relevant authority before offering fund units.

d. For the purposes of this Part, any reference to the “investment fund" in these Regulations or the Capital Market Law and its Implementing Regulations, applies to the investment fund that takes the form of a special purpose entity.

- It is proposed to add Paragraph (c) to Article (108) of The Draft Amendments of Investment Funds Regulations, obligating the manager of investment funds that take the form of a special purpose entity not to offer the fund's units until the by-laws have been certified by the relevant authority.

ANNEX 1
REQUIREMENTS OF THE FUND'S TERMS AND CONDITIONS

...

Content of the Cover Page:

d) Fund summary, containing at least the following:

13	Date of commencing the fund

...

3) Investment Policies and Practices:

a. The Investment objectives of the investment fund
b. Type or types of securities in which the investment fund will invest in primarily.
c. Any concentrated policy of investment in specific securities, or in an industry or group of sectors, or in a specific country or geographic region, provided that it includes the minimum and maximum for such securities.
d. A table showing the percentage of investment in each investment field, with its minimum and highest limits.
‌e. The securities markets in which the investment fund intends to invest in.
...
‌n. The benchmark, as well as information about the provider of the benchmark and the bases and the methodology used to calculate the benchmark.
‌o. Where derivatives are used, there must be a prominent statement that states the purpose of using such instruments (e.g., efficient portfolio management, meeting investment objectives or merely for hedging purposes from the price volatility).
‌p. Any waivers approved by the Capital Market Authority for any investment limits and restrictions;
...
9) Fees, Charges and Expenses

‌a. Statement of details on all payments from the assets of the investment fund, and the method for calculating them.

‌b. A table showing all fees and expenses, how the fees, charges and expenses are calculated and when it is paid by the investment fund.

‌c. Hypothetical table that shows the percentage of the fund expenses against the total fund asset value for the fund and the unitholder throughout the lifespan of the fund. Such fund shall include percentage of recurring non-recurring expenses.

...

32) Additional Information Requirements for Certain Types of Funds:

...

‌c. In the case of a capital protected fund, a statement that the capital will be protected only if the units are held until the maturity of the fund and the redemption of the units prior to the maturity of the fund may be at a price lower than the invested value, and where there is a better treatment for redemption requests before the maturity of the fund, they must contain a statement of such treatment.

f. In case of a fund of funds, a disclosure that the underlying funds are subject to other fees.

‌g. The criteria for determining the investment field must be stated in case the investment field in the fund is specified.

‌h. In the case of an investment fund that takes the form of a special purpose entity, must include the special purpose entity by-laws form.

ANNEX 1
REQUIREMENTS OF THE FUND'S TERMS AND CONDITIONS

...

Content of the Cover Page:

d) Fund summary, containing at least the following:

13	Date of Operating the fund

...
3) Investment Policies and Practices:

a. The Investment objectives of the investment fund
b. Type or types of securities in which the investment fund will invest in primarily.
c. Any concentrated policy of investment in specific securities, or in an industry or group of sectors, or in a specific country or geographic region, provided that it includes the minimum and maximum for such securities.
d. A table showing the percentage of investment in each investment field, with its minimum and highest limits.
‌e. Report on the credit rating or investment grade of the fund's investments (where applicable).
f. The securities markets in which the investment fund intends to invest in.
...
‌o. The benchmark, reasons for choosing such benchmark, and its suitability for fund's investment strategies and objectives, as well as information about the provider of the benchmark and the bases and the methodology used to calculate the benchmark (total return or price return).
‌p. Where derivatives are used, there must be a prominent statement that states the purpose of using such instruments (e.g., efficient portfolio management, meeting investment objectives or merely for hedging purposes from the price volatility).
‌q. Any waivers approved by the Capital Market Authority for any investment limits and restrictions;
...
9) Fees, Charges and Expenses

‌a. Statement of details on all payments from the assets of the investment fund, and the method for calculating them.

‌b. A table showing all fees and expenses, how the fees, charges and expenses are calculated and when it is paid by the investment fund.

‌c. Hypothetical table that shows the percentage of the fund expenses against the net assets value for the fund and the unitholder throughout the lifespan of the fund. Such fund shall include percentage of recurring non-recurring expenses.
...
32) Additional Information Requirements for Certain Types of Funds:

...

‌c. In the case of a capital protected fund, a statement must be included in the Fund's terms and conditions specifying the requirements for protecting the invested capital.

f. In case of a fund of funds, a disclosure that the underlying funds are subject to other fees.

‌g. The criteria for determining the investment field must be stated in case the investment field in the fund is specified.

‌h. In the case of an investment fund that takes the form of a special purpose entity, must include the special purpose entity by-laws form.

- It is proposed to amend sub-Paragraph (13) of Paragraph (d) of Annex (1) of The Draft Amendments of Investment Funds Regulations, by replacing the phrase "Date of commencing the fund" with the phrase "Date of Operating the fund".

- It is proposed to add a sub-Paragraph (e) of Paragraph (3) of Annex (1) of The Draft Amendments of Investment Funds Regulations, in order for indicating the credit rating or investment grade of fund's investments.

- It is proposed to amend Sub-Paragraph (o) of Paragraph (3), of Annex (1) of The Draft Amendments of Investment Funds Regulations, in order to clarify reasons for choosing such benchmark and its suitability for fund's investment strategies and objectives, and the methodology used to calculate the benchmark.

- It is proposed to amend sub-Paragraph (c) of Paragraph (9), of Annex (1) of The Draft Amendments of Investment Funds Regulations, by replacing the phrase "Total Fund Assets" with the phrase "Net Fund Assets"

- It is proposed to amend Sub-Paragraph (c) of Paragraph (32) of Annex (1) of The Draft Amendments of Investment Funds Regulations, by replacing the phrase “statement that the capital will be protected only if the units are held until the maturity of the fund and the redemption of the units prior to the maturity of the fund may be at a price lower than the invested value, and where there is a better treatment for redemption requests before the maturity of the fund, they must contain a statement of such treatment" with the phrase “a statement must be included in the Fund's terms and conditions specifying the requirements for protecting the invested capital".

ANNEX 3
CONTENTS OF FUND'S REPORTS

A fund report is used to provide regular and relevant information that would enable unitholders to evaluate the performance of the investment fund.
Annual Reports must contain all the information required in this Annex.
Interim Reports of the private real estate fund must contain at least the information required under Paragraphs (C) and (F) of this Annex.
Content of Fund Annual Reports
a. Investment Fund Information
1) Name of investment fund.
2) Investment objectives, policies and polices.
3) Distribution of income and gain policy.
4) A statement that the fund's Reports are available upon request free of charge.
5) Description of the fund's benchmark and the service provider's website (if any).
…

f. Financial Statements

Financial statements for the annual accounting period (or the interim period covered in the report) of the investment fund must be prepared in accordance with the accounting standards approved by the Saudi Organization of Certified Public Accountants.

ANNEX 3
CONTENTS OF FUND'S REPORTS

A fund report is used to provide regular and relevant information that would enable unitholders to evaluate the performance of the investment fund.
Annual Reports must contain all the information required in this Annex.
Interim Reports of the private real estate fund must contain at least the information required under Paragraphs (C), (F) and (G) of this Annex.
Content of Fund Annual Reports
a. Investment Fund Information
1) Name of investment fund.
2) Investment objectives, policies and polices.
3) Distribution of income and gain policy.
4) A statement that the fund's Reports are available upon request free of charge.
5) Description of the fund's benchmark, reasons for choosing such benchmark, and its suitability for fund's investment strategies and objectives, as well as the service provider's website (if any).
…

f. Financial Statements

- It is proposed to amend the Introduction of Annex (3) of The Draft Amendments of Investment Funds Regulations, by referring to Paragraph (G) of the same Annex, specifying that Interim Reports of the private real estate fund must contain at least the information required under Paragraphs (C), (F), and (G) of this Annex.

- It is proposed to amend Subparagraph (5) of Paragraph (A) of Annex (3) of The Draft Amendments of Investment Funds Regulations, in order to clarify reasons for choosing such benchmark and its suitability for fund's investment strategies and objectives.

- It is proposed to to make drafting amendments to Paragraph (f) of Annex (3) of The Draft Amendments of Investment Funds Regulations.

ANNEX 4
CONTENTS OF THE QUARTER STATEMENTS

The quarter statement must include the following information as a minimum:
...
‌f. Price information as at the end of the relevant quarter (month / year):

1) Unit Price (as at the end of the relevant quarter)	Saudi Riyals
2) Change in unit price (compared to the previous quarter)	%
3) Dual unit price for money market funds, and debt instruments funds with fixed income (if any)	Saudi Riyals
4) Total units of the fund	Number of units
5) Total net assets	Saudi Riyals
6) P/E ratio (if any)

J. A graph indicating the top 10 investments of the fund.

‌k. A graph indicating the fund's asset distribution (sector/geographic).

‌l. ‌ Revenue:

m. Performance and risks:

n. A graph indicating the performance since the fund's inception.

ANNEX 4

CONTENTS OF THE QUARTER STATEMENTS

The quarter statement must include the following information as a minimum:
...
‌f. Price information as at the end of the relevant quarter (month / year):

1) Unit Price (as at the end of the relevant quarter)	Currency of the Fund
2) Change in unit price (compared to the previous quarter)	%
3) Dual unit price for money market funds, and debt instruments funds with fixed income (if any)	Currency of the Fund
4) Total units of the fund	Number of units
5) Total net assets	Currency of the Fund
6) P/E ratio (if any)

J. A graph indicating the top 10 investments of the fund.

‌k. a statement on the fund's dividends distributed to the unitholders, if any; as follows:
1. Total dividends distributed in the relevant quarter.
2. Number of existing units for which distributions have been
made during the relevant quarter.
3. The value of the dividends distributed during the relevant quarter for each unit.
4. The percentage of distribution from the fund's net asset value;
5. Eligibility for cash dividends distributed during the relevant quarter.
l. A graph indicating the fund's asset distribution (sector/geographic).
‌m. ‌ Revenue:

n. Performance and risks:

o. A description of formulas utilized for assessing performance and risk measures:

Standard deviation.
Sharp indicator.
Tracking Error
Beta
Alpha

p. A graph indicating the performance since the fund's inception.

- It is proposed to amend Several parts of Paragraph (f) of Annex (4) of The Draft Amendments of Investment Funds Regulations, by replacing the phrase "Saudi Riyals" with the phrase "Currency of the Fund".

- It is proposed to add a Paragraph (k) to Annex (4) of The Draft Amendments of Investment Funds Regulations, to include contents of the quarter statements of dividends distributed to unitholders.

- It is proposed to add Paragraph (o) to Annex (4) of The Draft Amendments of Investment Funds Regulations, in order to specify formulas utilized for assessing performance and risk measures.

ANNEX 5
VALUATION METHODOLOGIES FOR PUBLIC FUNDS

Method of Valuation:

...

c) The following principles shall be followed to value the fund's assets:

1) if the assets are securities which are listed or traded on any regulated securities exchange or automated quotation system, the closing price may be used of such market or system
2) where the securities are suspended, it should be valued at the suspended price, unless there is conclusive evidence to indicate that the value of such securities have gone below the suspended price;
3) non-listed Bond and Sukuk, book value plus accrued interest or profit must be used;
4) listed Bond and Sukuk or traded on any organized securities market or on an automated pricing system but where the conditions of that market or system do not allow for the evaluation of bonds or sukuk as referred to in sub-Paragraph (1) above, such bonds and sukuk may be evaluated as referred to in sub-Paragraph (3), provided that this is disclosed in the terms and conditions of the fund.

ANNEX 5

VALUATION METHODOLOGIES FOR PUBLIC FUNDS

Method of Valuation:
...
c) The following principles shall be followed to value the fund's assets:
1) if the assets are securities which are listed or traded on any regulated securities exchange or automated quotation system, the closing price may be used of such market or system
2) where the securities are suspended, it should be valued at the suspended price, unless there is conclusive evidence to indicate that the value of such securities have gone below the suspended price;
3) non-listed Bond and Sukuk, book value plus accrued interest or profit must be used;
4) listed Bond and Sukuk or traded on any organized securities market or on an automated pricing system but where the conditions of that market or system do not allow for the evaluation of bonds or sukuk as referred to in sub-Paragraph (1) above, the Fund Manager may evaluate such bonds and sukuk in such manner as it deems appropriate, provided that this is disclosed in the terms and conditions of the fund.

It is proposed to amend Sub-Paragraph (4) of Paragraph (c) of Annex (5) of The Draft Amendments of Investment Funds Regulations, in order to provide Fund Managers with the flexibility to determine an appropriate valuation method, provided that this is disclosed in the terms and conditions of the fund.

ANNEX6
PRIVATE PLACEMENT NOTIFICATION TO THE AUTHORITY – PRIVATE FUNDS AND FOREIGN FUNDS

THE INVESTMENT FUND
1	Information about the Investment Fund to be offered

3. (For foreign fund) Please provide the following information:

a) Name of Regulatory Authority

b) Place of Establishment

ANNEX 6

PRIVATE PLACEMENT NOTIFICATION TO THE AUTHORITY – PRIVATE FUNDS AND FOREIGN FUNDS

THE INVESTMENT FUND
1	Information about the Investment Fund to be offered

3. (For foreign fund) Please provide the following information:
a) Type of fund offering in place of establishment

b) Place of Establishment

c) Name of Regulatory Authority

It is proposed to add a Sub-Paragraph (a) to Paragraph (3) of Annex (6) of The Draft Amendments of Investment Funds Regulations.

ANNEX 11

REQUIREMENTS OF THE PRIVATE FUND'S TERMS AND CONDITIONS

Fund Manager must present the Fund's Terms and Conditions in Arabic and in a manner easy to comprehend and understand by the unitholders and potential unitholders, the Terms and Conditions must include the following information according to the sequence shown in this annex:

Content of the Cover Page:
a) Name of the fund, its type and class.
b) Name of the Fund Manager.
c) Name of the fund operator.
d) Name of the custodian.
e) Name of the developer (if any).
f) Must include the following statement:

...

6) A summary of the Fund's strategies to achieve its objective, which includes at least the Following:

a. A description of type (or types) of the assets of real estate or investments such Fund will invest in (where applicable).

...
‌e. Lending and borrowing powers for the Fund and the Fund Manager policy in the exercise of these powers.
‌f. Methods and ways to invest the liquidity available in the fund.
...
8) Subscription
‌a. Providing sufficient information on the subscription which includes subscription and termination dates.
‌b. Clarifying weather the fund takes or accepts an in-kind subscriptions.
‌c. Shall include a commitment from the Fund Manager to comply with Law of Real Estate Ownership and Investment by Non-Saudis (as applicable).
‌d. A detailed statement of any minimum amount that the Fund Manager intends to collect, and the action taken in the absence of reaching that minimum limit in the fund.
‌e. A statement to clarifies the targeted group that are fitted to invest in the fund (qualified investors to invest in the fund).
...

ANNEX 11

REQUIREMENTS OF THE PRIVATE FUND'S TERMS AND CONDITIONS

6) A summary of the Fund's strategies to achieve its objective, which includes at least the Following:

a. A description of type (or types) of the assets and investments such Fund will invest in (where applicable).

...
‌e. Lending and borrowing powers for the Fund, the Fund Manager policy in the exercise of these powers, and the borrowing cap.

‌f. Methods and ways to invest the liquidity available in the fund.
g. Policy for disposal of the fund's assets.
...
8) Subscription
‌a. Providing sufficient information on the subscription which includes subscription and termination dates.
‌b. Clarifying weather the fund takes or accepts an in-kind subscriptions.
‌c. Shall include a commitment from the Fund Manager to comply with Law of Real Estate Ownership and Investment by Non-Saudis (as applicable).
‌d. A detailed statement of the fund's target capital, the nominal value per unit, any minimum amount that the Fund Manager intends to collect, and the action taken in the absence of reaching that minimum limit in the fund.
‌e. Policy for raising the fund's capital (if any).
‌f. The currency of the fund.
‌g. Policy for Capital Call in Instalments, and the actions to be taken in cases of default, where applicable.
‌h. A statement to clarifies the targeted group that are fitted to invest in the fund (qualified investors to invest in the fund).
...

- It is proposed to add Paragraph (f) to Annex (11) of The Draft Amendments of Investment Funds Regulations, requiring the inclusion of the name of distributor (if any) on the cover page of the private fund's terms and conditions.

- It is proposed to amend Sub-Paragraph (a) of Paragraph (6) of Annex (11) of The Draft Amendments of Investment Funds Regulations, in order to include all asset types, rather than limiting it to real estate assets.

- It is proposed to amend Sub-Paragraph (e) of Paragraph (6) of Annex (11) of The Draft Amendments of Investment Funds Regulations, in order to clarify the borrowing cap.

- It is proposed to add a Sub-Paragraph (g) to Paragraph (6) of Annex (11) of The Draft Amendments of Investment Funds Regulations, by adding a policy for disposal of the fund's assets under the summary of the Fund's strategies to achieve its objective.

- It is proposed to amend Sub-Paragraph (d) of Paragraph (8) of Annex (11) of The Draft Amendments of Investment Funds Regulations, by including a detailed statement of fund's target total asset value and the nominal value per unit.

- It is proposed to add Sub-Paragraphs (“e", “f", and “g") to Paragraph (8) of Annex (11) of The Draft Amendments of Investment Funds Regulations.

ANNEX 14
FUND TERMINATION REPORT

The fund termination report is used to provide relevant information regarding the process of the investment fund's termination or liquidation.

The fund termination and liquidation report must contain all the information required under this Annex.

…

h) Financial statements:

The final audited financial statements of the investment fund for the period following the last annual audited financial statements must be prepared in accordance with the accounting standards approved by the Saudi Organization for Certified Public Accountants.

ANNEX 14
FUND TERMINATION REPORT

The fund termination report is used to provide relevant information regarding the process of the investment fund's termination or liquidation.

The fund termination and liquidation report must contain all the information required under this Annex.

…

h) Financial statements:

It is proposed to make drafting amendments to Paragraph (h) of Annex (14) of The Draft Amendments of Investment Funds Regulations.

2.00000000000000

Real Estate Investment Funds Regulations

The Current Provisions

Provisions After Proposed Amendment

Clarification

Article 13: Fund Management
‌a) The Fund Manager must act for the benefit of unitholders in accordance with these Regulations, the Capital Market Institutions Regulations and the terms and conditions of the fund.
…
‌e) Fund Manager's Duties:
1. set out decision making procedures that should be followed when executing technical and administrative issues of the Fund's businesses and projects.
2. comply with all laws and regulations valid in the Kingdom related to the Fund's business
…
10. The Fund Manager must comply with the provisions of Annex (12) of these Regulations when applying for an approval from or notifying the Authority requests.
11. The Fund Manager must comply with the fund's terms and conditions.
12. The Fund Manager must prepare an annual report that includes all complaints and the measures taken to address them, and it shall submit such report to the Fund's board.
13. The Fund Manager must comply with the Instructions for Investment Funds Announcements.

Article 13: Fund Management
‌a) The Fund Manager must act for the benefit of unitholders in accordance with these Regulations, the Capital Market Institutions Regulations and the terms and conditions of the fund.
...
‌e) Fund Manager's Duties:
1. set out decision making procedures that should be followed when executing technical and administrative issues of the Fund's businesses and projects.
2. comply with all laws and regulations valid in the Kingdom related to the Fund's business
…
10. The Fund Manager must immediately notify the Authority upon the commencement of the Fund's operation.
11- The Fund Manager must comply with the provisions of Annex (12) of these Regulations when applying for an approval from or notifying the Authority requests.
12. The Fund Manager must comply with the fund's terms and conditions.
13. The Fund Manager must prepare an annual report that includes all complaints and the measures taken to address them, and it shall submit such report to the Fund's board.
14. The Fund Manager must comply with the Instructions for Investment Funds Announcements.

It is proposed to add a new Sub-Paragraph (“10") to Paragraph (a) of Article (13) of The Draft Amendments of the Real Estate Investment Funds Regulations, in order to clarify that the Fund Manager must promptly notify the Authority upon the commencement of the Fund's operation.

1) That the units of the publicly offered investment funds shall be distributed through the distributer's website only.

2) The website of the delegated distributor provides the ability to fill and sign the required documents, including:

a) The fund manager's investment account opening agreement.

b) The “Know Your Client" form provided in the Capital Market Institutions Regulations.

c) The fund's subscription form, and the Fund's Terms and Conditions in which a client wishes to participate.

Article 15: Delegation by the Fund Manager

...
f) The distributor that has been delegated in the Kingdom pursuant to Paragraph (e) of this Article, must be one of the following:
1) a capital market institution licensed to carry out dealing activity.
2) a capital market institution licensed to carry out advising activity.
3) a local bank.
4) Investment Fund Distribution Platform
5) Company authorized by the Saudi Central Bank to provide electronic wallet services.
g. The delegation referenced in Paragraph (e) of this Article must be made pursuant to a contract in writing, and where the distributor is a local bank or a Company authorized by the Saudi Central Bank to provide electronic wallet servicesit must include the following controls at minimum:
1) That the units of the publicly offered investment funds shall be distributed through the distributer's website or application only.

2) The website or application of the delegated distributor provides the ability to fill and sign the required documents, including:

a) The fund manager's investment account opening agreement.

b) The “Know Your Client" form provided in the Capital Market Institutions Regulations.

c) The fund's subscription form, and the Fund's Terms and Conditions in which a client wishes to participate.

...

- It is proposed to add a Subparagraphs (4) and (5) to Paragraph (f) of Article 15 of the draft amendment to the Real Estate Investment Funds Regulations, to enable the distribution of investment funds units through an investment fund distribution platform and Company licensed by the Saudi Central Bank to provide electronic wallet services.

- It is proposed to amend Paragraph (g) of Article 15 of the draft amendment to the Real Estate Investment Funds Regulations by adding the phrase “or a Company licensed by the Saudi Central Bank to provide electronic wallet services." and to amend Subparagraphs (1) and (2) of paragraph (g) of this Article by adding the phrase “or application".

Article 16: Removal and Replacement of Fund Manager
A) The Authority shall have the power to remove a Fund Manager in relation to a particular real estate investment fund and to take any action it deems appropriate to appoint a replacement Fund Manager for that investment fund or to take any other measures it deems necessary in the event of:
1. the Fund Manager ceasing to carry out managing investments and operating funds activity without notification to the Authority under the Capital Market Institutions Regulations;
2. the cancellation, withdrawal or suspension by the Authority of the Fund Manager's authorization(s) to carry out managing investments and operating funds activity.
3. a request by the Fund Manager to the Authority to cancel its relevant authorization to carry out managing investments and operating funds activity;
4. the Authority believing that the Fund Manager has failed, in a manner which the Authority considers material, to comply with the Capital Market Law or its Implementing Regulations;
5. the death, incapacity or resignation of a portfolio manager who manages the assets of the real estate investment fund, if no other registered person employed by the Fund Manager can manage the assets of the real estate investment fund or the assets of the funds managed by the portfolio manager;
6. the issuance of a special fund resolution by unitholders of a close ended fund requesting the Authority of removal of the Fund Manager;
7. any other event determined by the Authority on reasonable grounds to be of sufficient material.
‌B) Notice of any event described in Subparagraph (5) of Paragraph (a) of this Article must be provided by the Fund Manager to the Authority within (2) days from the date of its occurrence.
‌C) Upon removal of the Fund Manager in accordance with the cases stipulated in Subparagraphs (1), (2), (3), (4), (5) and (7) of Paragraph (a) of this Article, the Authority shall directs the removed Fund Manager to call for a unitholders meeting within (15) days from the date of the Authority's removal decision, in order to appoint the custodian or other party, through an ordinary fund resolution, to find and negotiate with a replacement Fund Manager and specify the time limit for finding and negotiation.
D) Upon removal of the Fund Manager in accordance with the case stipulated in Subparagraph (6) of Paragraph (a) of this Article, the Fund Manager must issue an ordinary fund resolution at the same meeting in which unitholders voted on the request to remove the Fund Manager, in order to appoint the custodian or other party, to find and negotiate with a replacement Fund Manager and specify the time limit for finding and negotiation.
‌E) When any of the two cases stipulated in Paragraphs (c) and (d) of this Article occurs, the Fund Manager must notify the Authority of the results of the unitholders meeting within two days of its convening date.
F) The Fund Manager must cooperate and provide the custodian or the party assigned to find and negotiate any documents required by it for the purpose of appointing a replacement Fund Manager within (10) days from the date of the request, and both parties must maintain the confidentiality of the information.
‌g) The Fund Manager must, upon approval of the replacement Fund Manager to manage the fund and transfer of the fund management to it, send a written consent of the replacement Fund Manager to the Authority as soon as it is received.

‌H) If the Authority exercises any of its powers pursuant to Paragraph (a) of this Article, the relevant Fund Manager shall co-operate fully in order to help facilitate a smooth transfer of responsibilities to the replacement Fund Manager during the initial (60) days period after the appointment of the replacement Fund Manager. The Fund Manager must where necessary, appropriate and at the Authority its absolute discretion, transfer all of the contracts relating to the relevant real estate investment fund to the replacement Fund Manager.
I) Unitholders are entitled to request the liquidation of the fund by a special fund resolution in the event that a replacement Fund Manager has not been appointed within the period for search and negotiation stipulated in Paragraphs (c) and (d) of this Article.

Article 16: Removal and Replacement of Fund Manager
A) The Authority shall have the power to remove a Fund Manager in relation to a particular real estate investment fund and to take any action it deems appropriate to appoint a replacement Fund Manager for that investment fund or to take any other measures it deems necessary in the event of:
1. the Fund Manager ceasing to carry out managing investments and operating funds activity without notification to the Authority under the Capital Market Institutions Regulations;
2. the cancellation, withdrawal or suspension by the Authority of the Fund Manager's authorization(s) to carry out managing investments and operating funds activity.
3. a request by the Fund Manager to the Authority to cancel its relevant authorization to carry out managing investments and operating funds activity;
4. the Authority believing that the Fund Manager has failed, in a manner which the Authority considers material, to comply with the Capital Market Law or its Implementing Regulations;
5. the death, incapacity or resignation of a portfolio manager who manages the assets of the real estate investment fund, if no other registered person employed by the Fund Manager can manage the assets of the real estate investment fund or the assets of the funds managed by the portfolio manager;
6. the issuance of a special fund resolution by unitholders of a close ended fund requesting the Authority of removal of the Fund Manager;
7. any other event determined by the Authority on reasonable grounds to be of sufficient material.
‌B) Notice of any event described in Subparagraph (5) of Paragraph (a) of this Article must be provided by the Fund Manager to the Authority within (2) days from the date of its occurrence.
‌C) For removal of the Fund Manager in accordance with the cases stipulated in Subparagraphs (1), (2), (3), (4), (5) and (7) of Paragraph (a) of this Article, the Authority shall directs the Fund Manager to call for a unitholders meeting within (15), in order to appoint the custodian or any other party, through an ordinary fund resolution, to find and negotiate with a replacement Fund Manager and specify the time limit for finding and negotiation.

D) For removal of the Fund Manager in accordance with the case stipulated in Subparagraph (6) of Paragraph (a) of this Article, the Fund Manager must issue an ordinary fund resolution at the same meeting in which unitholders voted on the request to remove the Fund Manager, in order to appoint the custodian or any other party, to find and negotiate with a replacement Fund Manager and specify the time limit for finding and negotiation.
‌E) When any of the two cases stipulated in Paragraphs (c) and (d) of this Article occurs, the Fund Manager must notify the Authority of the results of the unitholders meeting within two days of its convening date.
F) The Fund Manager must cooperate and provide the custodian or the party assigned to find and negotiate any documents required by it for the purpose of appointing a replacement Fund Manager within (10) days from the date of the request, and both parties must maintain the confidentiality of the information.
‌g) The Fund Manager must, upon approval of the replacement Fund Manager to manage the fund and transfer of the fund management to it, send a written consent of the replacement Fund Manager to the Authority as soon as it is received.
‌H) If the Authority exercises any of its powers pursuant to Paragraph (a) of this Article, the relevant Fund Manager shall co-operate fully in order to help facilitate a smooth transfer of responsibilities to the replacement Fund Manager during the initial (60) days period after the appointment of the replacement Fund Manager. The Fund Manager must where necessary, appropriate and at the Authority its absolute discretion, transfer all of the contracts relating to the relevant real estate investment fund to the replacement Fund Manager.
i) The removed Fund Manager must not charge management fees or any other fees starting from the date of the Authority's decision to remove him.

j) Unitholders are entitled to request the liquidation of the fund by a special fund resolution in the event that a replacement Fund Manager has not been appointed within the period for search and negotiation stipulated in Paragraphs (c) and (d) of this Article.

- It is proposed to amend Paragraph (c) of Article 16 of the draft amendment to the Real Estate Investment Funds Regulations by deleting the phrase “from the date of the Authority's removal decision"

- It is proposed to amend Paragraph (c) of Article (16) of The Draft Amendments of the Real Estate Investment Funds Regulations, in order to provide further clarity regarding the sequence of procedures. Additionally, the word “any" has been added to the phrase “other party".

- It is proposed to amend Paragraph (d) of Article (16) of The Draft Amendments of the Real Estate Investment Funds Regulations, by adding the word “any" before the phrase “other party"

- It is proposed to add a new Paragraph (“i") to Article (16) of The Draft Amendments of the Real Estate Investment Funds Regulations, to clarify that Fund Managers are not entitled to any management fees starting from the date of the authority's decision to remove them.

Article 17: The Voluntary Withdrawal of the Fund Manager

a) If the Fund Manager wishes to voluntarily withdraw from managing the fund, the following requirements must be fulfilled:
1. Obtaining the approval of the unitholders of the relevant fund to replace the Fund Manager and appoint a replacement Fund Manager through an ordinary fund resolution.
2. Obtaining the approval of the replacement Fund Manager to manage the relevant fund.
3. Obtaining the Authority's approval.
b) The voluntarily withdrawing Fund Manager must transfer the responsibilities of managing the relevant fund to the replacement Fund Manager within (60) days from the issuance of the Authority's approval. The withdrawing Fund Manager shall, where necessary and appropriate, transfer to the replacement Fund Manager all contracts related to the relevant investment fund.

It is proposed to add Article (17) to The Draft Amendments of the Real Estate Investment Funds Regulations, to regulate the provisions for the voluntary withdrawal of the Fund Manager.

Article 18: Financial Statements
A) The financial statements of the fund must be prepared in the Arabic language, at least semi-annually, and examined according to the accounting standards approved by the Saudi Organization for Certified Public Accountants. Additional copies may be prepared in other languages, and in case of any conflict between those copies, the Arabic text shall prevail.
B) The annual financial statements of the fund must be reviewed in accordance with the accounting standards approved by the Saudi Organization for Certified Public Accountants (SOCPA), and the auditor of the fund, through reviewing the financial statements and based on the information provided to it, must include in its report what may come to its attention of violations of the provisions of the Real Estate Investment Funds Regulations or the fund's terms and conditions.

Article 18: Financial Statements
A) The financial statements of the fund must be prepared in the Arabic language, at least semi-annually, Additional copies may be prepared in other languages, and in case of any conflict between those copies, the Arabic text shall prevail.
b) The interim financial statements of the Fund must be prepared in accordance with the accounting standards approved by the Saudi Organization for Chartered and Professional Accountants, and must be examined in accordance with the auditing standards approved by the Saudi Organization Chartered and Professional Accountants.
c) The public fund whose establishment period is less than three (3) months is excluded from the requirement mentioned in paragraphs (a) and (b) of this Article.
d) The annual financial statements of the fund must be prepared in accordance with the accounting standards approved by the Saudi Organization Chartered and Professional Accountants, and must be reviewed in accordance with the auditing standards approved by the Saudi Organization Chartered and Professional Accountants, and the auditor of the fund, through reviewing the financial statements and based on the information provided to it, must include in its report what may come to its attention of violations of the provisions of the Real Estate Investment Funds Regulations or the fund's terms and conditions.

- It is proposed to make a number of drafting amendments to Article (18) of the draft amendment of the Real Estate Investment Funds Regulations.

- It is proposed to add a new Paragraph (c) to Article (18) of The Draft Amendments of the Real Estate Investment Funds Regulations, stipulating that the preparation of interim financial statements shall not be required for a public fund whose establishment period is less than three months.

Article 23: Meetings of Unitholders
...
D) The Fund Manager shall call for a meeting of unitholders by announcing it on its website and any other website available to the public according to the controls set out by the Authority, and by sending a notice in writing to all unitholders and the custodian giving not less than (10) days' prior notice of the meeting and not more than (21) days' notice before the meeting. The announcement and notice must specify the date, place and time of the meeting and the proposed resolutions and its agenda. The Fund Manager must provide a copy of such notice to the Authority.
e) When preparing the agenda for the unitholders' meeting, the Fund Manager must take into consideration the topics that the unitholders want to include, unitholders who own at least (10%) of the fund units' value are entitled to add one or more topics to the agenda of the unitholders' meeting. Provided that the proposed topic does not overlap with the responsibilities and duties of the Fund Manager in accordance with the provisions of these regulations.

Article 23: Meetings of Unitholders

...
D) The Fund Manager shall call for a meeting of unitholders by announcing it on its website and any other website available to the public according to the controls set out by the Authority, and by sending a notice in writing to all unitholders and the custodian giving not less than (10) days' prior notice of the meeting and not more than (21) days' notice before the meeting. The announcement and notice must specify the date, place and time of the meeting and the proposed resolutions and its agenda. The Fund Manager must provide a copy of such notice to the Authority.
e) Unitholders must be provided access, through the Fund Manager 's website and any other publicly accessible website in accordance with the controls set out by the Authority, to the necessary information and documents related to the items of the agenda when the call to the unitholders' meeting is published, to enable them to make an informed decision.

f) When preparing the agenda for the unitholders' meeting, the Fund Manager must take into consideration the topics that the unitholders want to include, unitholders who own at least (10%) of the fund units' value are entitled to add one or more topics to the agenda of the unitholders' meeting. Provided that the proposed topic does not overlap with the responsibilities and duties of the Fund Manager in accordance with the provisions of these regulations.

It is proposed to add a new Paragraph (e) to Article (23) of The Draft Amendments of the Real Estate Investment Funds Regulations, in order to clarify that unitholders must be given access to all required information and documents related to agenda items, through the Fund Manager's website and any other website available to the public, according to the controls set out by the Authority, upon issuing the invitation to unitholders' meeting, to enable unitholders to make well-informed decisions.

Article 26: Approval of the Authority and Consent of Unitholders to Fundamental Changes
a) A Fund Manager must obtain the consent of the unitholders in the relevant fund to the proposed fundamental change by way of an ordinary fund resolution.
b) As an exception to Paragraph (a) of this Article, the Fund Manager must obtain the consent of the unitholders in the relevant fund on the proposed fundamental change stipulated in sub-Paragraph (9) of Paragraph (d) of this Article by way of a special fund resolution.
c) A Fund Manager, after obtaining the consent of the unitholders specified in Paragraphs (a) and (b) of this Article, must obtain the approval of the Authority in the proposed fundamental change to the fund.
d) The term “fundamental change" means:
1. a significant change in the fund's purposes, nature or class;
2. a change which may have a material adverse effect on the

unitholders or their rights in relation to the closed-ended fund;
3. a change which alters the risk profile of the fund; or
4. the voluntary withdrawal of a Fund Manager from its position as the Fund Manager.
5. It usually causes unitholders to reconsider of their subscriptions in the closed-ended fund.
6. A change which results in any increased payments out of the assets of the closed-ended fund to a Fund Manager or any member of the fund board or an affiliate of either.
7. A change which introduces any new type of payment out of the assets of the closed-ended fund.
8. A change that materially increases other types of payment out of the assets of the closed-ended fund.
9. Change in the maturity date or termination of the closed-ended Fund.
10. Increase the total value of the ether fund assets by accepting cash or in-kind contributions, or both.
11. any other cases determined by the Authority from time to time and reported to the Fund Manager.
...

Article 26: Approval of the Authority and Consent of Unitholders to Fundamental Changes
a) A Fund Manager must obtain the consent of the unitholders in the relevant fund to the proposed fundamental change by way of an ordinary fund resolution.
b) As an exception to Paragraph (a) of this Article, the Fund Manager must obtain the consent of the unitholders in the relevant fund on the proposed fundamental change stipulated in sub-Paragraph (9) of Paragraph (d) of this Article by way of a special fund resolution.
c) A Fund Manager, after obtaining the consent of the unitholders specified in Paragraphs (a) and (b) of this Article, must obtain the approval of the Authority in the proposed fundamental change to the fund.
d) As an exception to Paragraph (c) of this Article, the Fund Manager, must obtain the consent of the Authority before obtaining the consent of the unitholders in the proposed fundamental change to the fund, specified in Sub-Paragraph (10) of Paragraph (e) of this Article.
e) The term “fundamental change" means:

1. a significant change in the fund's purposes, nature or class;
2. a change which may have a material adverse effect on the
unitholders or their rights in relation to the closed-ended fund;
3. a change which alters the risk profile of the fund; or
4. the voluntary withdrawal of a Fund Manager from its position as the Fund Manager.
5. It usually causes unitholders to reconsider of their subscriptions in the closed-ended fund.
6. A change which results in any increased payments out of the assets of the closed-ended fund to a Fund Manager or any member of the fund board or an affiliate of either.
7. A change which introduces any new type of payment out of the assets of the closed-ended fund.
8. A change that materially increases other types of payment out of the assets of the closed-ended fund.
9. Change in the maturity date or termination of the closed-ended Fund.
10. Increase the total value of the ether fund assets by accepting cash or in-kind contributions, or both.
11. any other cases determined by the Authority from time to time and reported to the Fund Manager.
...

It is proposed to add a new Paragraph (d) to Article (26) of The Draft Amendments of the Real Estate Investment Funds Regulations, specifying that “Notwithstanding Paragraph (c) of this Article, the Fund Manager, before obtaining the consent of the unitholders, must obtain the approval of the Authority in the proposed fundamental change to the fund, related to increasing the total value of the closed-ended public fund's assets by accepting cash or in-kind contributions, or both."

Article 34: Appointing the Developer and Engineering Office
In the event that one of the objectives of the fund includes the initial development or constructional development, the Fund Manager must appoint a developer and an engineering office independent from any of the related parties, after ensuring that they obtained the approvals and licenses required to carry out their business and activities from the relevant government entities. The engineering office shall - at minimum - oversee the implementation of the fund's business plan.

Article 34: Appointing the Developer and Engineering Office
In the event that one of the objectives of the fund includes the initial development or constructional development, the Fund Manager must appoint one or more developers, provided that the duties and responsibilities of each developer are clearly specified in the fund's terms and conditions, Additionally, an engineering office independent from any of the related parties, after ensuring that they obtained the approvals and licenses required to carry out their business and activities from the relevant government entities. The engineering office shall - at minimum - oversee the implementation of the fund's business plan.

It is proposed to amend Article (34) of The Draft Amendments of the Real Estate Investment Funds Regulations, to clarify that the Fund Manager may appoint more than one developer, provided that the duties and responsibilities of each developer are clearly specified in the fund's terms and conditions.

Article 36: Valuation of fund Asset and Calculation of Unit Price
‌a) The Fund Manager is responsible for performing fair valuation of the fund's assets.
b) The Fund Manager shall evaluate the Fund's assets at least once every (6) months based on a valuation prepared by two accredited valuers in accordance with the valuation policy set out in the fund's terms and conditions, and publish the accredited valuers' report on its website and the Exchange's website or any other website available to the public according to the controls set out by the Authority (where applicable) within a period not exceeding (15) days from issuing such report. The valuation reports shall include the rental market value of the relevant real estate (where applicable), and in case of more than two accredited valuers were appointed, the Fund Manager must publish all the accredited valuers' reports.
‌c) The net value of the unit shall be calculated by subtracting the Fund's total liabilities from its total assets, then dividing the result by the number of the fund's units, and this shall be considered as a benchmark price of the unit.

Article 36: Valuation of fund Asset and Calculation of Unit Price
‌a) The Fund Manager is responsible for performing fair valuation of the fund's assets.
b) Except for real estate assets, the Fund Manager must comply with the provisions of Annex (5) of the Investment Funds Regulations related to valuation methodologies for public funds.
c) The Fund Manager shall evaluate the Fund's real estate assets at least once every (6) months based on a valuation prepared by two accredited valuers in accordance with the valuation policy set out in the fund's terms and conditions, and publish the accredited valuers' report on its website and the Exchange's website or any other website available to the public according to the controls set out by the Authority (where applicable) within a period not exceeding (15) days from issuing such report. The valuation reports shall include the rental market value of the relevant real estate (where applicable), and in case of more than two accredited valuers were appointed, the Fund Manager must publish all the accredited valuers' reports.

‌d) The net value of the unit shall be calculated by subtracting the Fund's total liabilities from its total assets, then dividing the result by the number of the fund's units, and this shall be considered as a benchmark price of the unit.

- It is proposed to add a Paragraph (B), to Article 36 of the draft amendment to the Real Estate Investment Funds Regulations, granting Fund Managers the authority to conduct valuation in accordance with the valuation methods specified in Annex (5) of the Investment Funds Regulations related to valuation methodologies for public funds with the exception of real estate assets.

- It is proposed to amend Paragraph (C) of Article 36 in the draft amendment to the Real Estate Investment Funds Regulations, so that it is limited to the fund's real estate assets.

Article 37: Register of Unitholders
...
‌b) A Fund Manager may engage a third party or parties pursuant to a contract in writing to establish and maintain a register referred to in Paragraph (a) above.
‌c) Notwithstanding the appointment of a third party, the Fund Manager shall remain responsible for the discharge of all its duties in relation to the register of Unitholders under these Regulations.
‌...

Article 37: Register of Unitholders
...
B) A Fund Manager may engage an entity supervised by the Authority pursuant to a contract in writing to establish and maintain a register of unitholders referred to in Paragraph (A) of this Article.
C) Notwithstanding the appointment of another entity supervised by the Authority, the Fund Manager shall remain responsible for the discharge of all its duties in relation to the register under these Regulations.
...

- It is proposed amend Paragraphs (B) of Article 37 in the draft amendment to the Real Estate Investment Funds Regulations, by replacing the phrase “a third party or parties" with the phrase “an entity supervised by the Authority"

- It is proposed amend Paragraphs (c) of Article 37 in the draft amendment to the Real Estate Investment Funds Regulations, by replacing the phrase “a third party" with the phrase “another entity supervised by the Authority".

Article 38: Subscription and Offering
…
i) With the exception to the provisions of paragraph (e) of Article (45) of these Regulations, a unitholder who have subscribed in the fund with an in-kind contribution may reduce its ownership in the fund's units to a minimum of (50%) of the number of units issued corresponding to such right after one year from the date of subscription in the fund or the date of operation of the fund, whichever is further, unless the relevant fund's terms and conditions state a longer period.
…
k) The total value of the fund's assets may be increased according to the following mechanism:
1. The Fund Manager must obtain the unitholders' approval to offer additional units to the fund by accepting in-kind contributions or by accepting cash contributions, or both in accordance with Article (26) of these Regulations.
2. The Fund Manager must obtain the authority's approval to offer additional units to the fund by accepting in-kind contributions or by accepting cash contributions, or both.
…
l) The traded fund is excluded from the provisions of paragraphs (d) of this Article.

Article 38: Subscription and Offering
…
i) A unitholder who have subscribed in the fund with an in-kind contribution may reduce its ownership in the fund's units to a minimum of (50%) of the number of units issued corresponding to such right after one year from the date of subscription in the fund or the date of operation of the fund, whichever is further, unless the relevant fund's terms and conditions state a longer period.
…
k) The total value of the fund's assets may be increased according to the following mechanism:
1. The Fund Manager must obtain the Authority's approval before obtaining the unitholders' approval to offer additional units to the fund by accepting in-kind contributions or by accepting cash contributions, or both in accordance with Article 26 of these Regulations.
…
l) The traded fund is excluded from the provisions of paragraphs (d) of this Article, and from the provisions of paragraphs (i) of this Article without prejudice to the restrictions stated in paragraph (e) of Article 45 of these Regulations.

- It is proposed amend paragraph (i) of Article 38 in the draft amendment to the Real Estate Investment Funds Regulations.

- It is proposed amend Subparagraph (1) of paragraph (k) of Article 38 in the draft amendment to the Real Estate Investment Funds Regulations, so that the Fund Manager must obtain the Authority's approval before obtaining unitholders' approval. Additionally, Subparagraph (2) of Paragraph (k) of Article 38 in the draft amendment to the Real Estate Investment Funds Regulations has been omitted in light of the proposed amendment to referenced Subparagraph (1).

- It is proposed to amend paragraph (l) of Article 38 in the draft amendment to the Real Estate Investment Funds Regulations.

Article 43: Termination and Liquidation of the Fund

...

E) The Fund Manager must notify the Authority and the unitholders, in writing, of the details of the plan and procedures for the fund termination at least (21) days prior to the intended date for terminating the fund, without prejudice to the Fund's Terms and Conditions.
...
I) In the event of expiry of the fund's term and the Fund Manager has not completed the sale of the fund's assets before the expiry of its term, the Fund Manager must liquidate the assets and distribute the unitholders' dues among them within a period not exceeding (6) months from the date of the expiry of the fund's term.
...
M) The Fund Manager must treat all unitholders equally during the fund termination or liquidation process.
...

Article 43: Termination and Liquidation of the Fund

...

E) The open-ended Fund Manager must notify the Authority and the unitholders, in writing, of the details of the plan and procedures for the fund termination at least (21) days prior to the intended date for terminating the fund, without prejudice to the fund's terms and conditions.
...
I) In the event of expiry of the fund's term and the Fund Manager has not completed the sale of the fund's assets before the expiry of its term, the Fund Manager must liquidate the assets and distribute the unitholders' dues among them within a period not exceeding (12) months from the date of the expiry of the fund's term.
...

M) The Fund Manager must treat all unitholders equally during the fund termination or liquidation process, and shall take their interests into account, in accordance with the provisions of the Law and its Implementing Regulations.
N) The Fund Manager is not permitted to charge management fees upon the liquidation period.
...

- It is proposed amend Paragraph (E) of Article 43 in the draft amendment to the Real Estate Investment Funds Regulations by adding the word “open-ended", so that the requirement mentioned in the referenced Paragraph applies to the managers of open-ended funds."

- It is proposed to amend the mandatory liquidation period mentioned in Paragraph (I) of Article 43 in the draft amendment to the Real Estate Investment Funds Regulations, extending it to 12 months instead of 6 months.

- It is proposed to amend Paragraph (M) of Article 43 in the draft amendment to the Real Estate Investment Funds Regulations to emphasize the importance of the Fund Manager taking the interests of all unitholders into account during the process of terminating or liquidating the fund, in accordance with the provisions of the Law and its Implementing Regulations.

- It is proposed to add a Paragraph (N), to Article 43 in the draft amendment to the Real Estate Investment Funds Regulations, to clarify that the Fund Manager shall not be paid management fees during the liquidation period.

Article 45: General Provision
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e) No person or group of persons having their names listed on the fund's terms and conditions, upon establishment, indicating their ownership of (5%) or more of the fund's units -through in-kind contribution- may dispose any of the units in which they subscribed during the first year of trading commencement of the relevant fund's units.
f) Without prejudice to paragraph (k) of Article (38) of these Regulations, it is not permissible to dispose the units allocated to subscribers by in-kind contributions of (5%) or more through the mechanism of increasing the fund's total assets value within the first year of its trading commencement.
…

Article 45: General Provision
…

e) No person or group of persons having their names listed on the fund's terms and conditions, upon establishment, indicating their ownership in the fund's units through in-kind contribution may dispose any of the units in which they subscribed during the first year of trading commencement of the relevant fund's units.
f) Without prejudice to paragraph (k) of Article (38) of these Regulations, it is not permissible to dispose the units allocated to subscribers by in-kind contributions through the mechanism of increasing the fund's total assets value within the first year of its trading commencement.

…

It is proposed to amend Paragraphs (e) and (f) of Article 45 in the draft amendment to the Real Estate Investment Funds Regulations.

Article 46: Conditions for Offering REITs
...
b) The Fund Manager must comply with the following at all times:
1. Investment Policy:
the fund's investments value in constructionally developed real estate, and qualified to generate periodic rental income must not be less than (75%) of the fund's total assets value according to the last audited financial statements.

2. Distributions: the distributed profits on unitholders must not be less than (90%) of the fund's net profits annually.

4. Fund's assets requirements: with regards to Articles (35) and (36) of these Regulations, the Fund Manager must ensure the provision of valuation reports for the real estate, prepared by two accredited valuers, with the Saudi Authority for Accredited Valuers' fellowship, and publish them during the offer period on its website and the Exchange's website. The reports shall contain an assessment of market rents and the assessment period shall not exceed three months of the offering commencement date. Where more than two accredited valuers were appointed, the Fund Manager must publish all the accredited valuers' reports.

2. Distributions: the distributed profits on unitholders must not be less
than (90%) of the fund's net profits annually.

3. Asset restrictions:
a) the Fund Manager may not invest in white lands. the Fund Manager is allowed to invest up to 25% of the fund's total assets value, according to the last audited financial statements, in any of the following:
1. Real estate development, whether the real estate is owned by the Fund Manager or not. If a REIT traded in the parallel market, it may invest in real estate development upon the establishment of the fund without adhering to the stated percentages in Investment Policy and Asset restrictions as stipulated in Paragraph (b) of this Article.
2. Renovation and re-development of real estate.
3. Real estate re-purchase agreements.
4. Cash and such, units of investment funds licensed by the Authority and real estate companies.
5. In case of RIETs traded in the Main market, Usufruct rights.
6. Treasury units
7. Debt instruments.
(B) The manager of REIT traded in the parallel market must, upon completion of the development of the real estate under investment, ensuring that the real estate becomes a constructionally developed asset capable of generating rental and periodic income, comply with the investment in real estate development shall not exceed 25% of the total value of the fund's assets, whether or not owned by it.
c) The Fund Manager is prohibited from investing more than (25%) of the fund's total assets value, according to the last audited financial statements in real estate outside the Kingdom.
‌d) A REIT may not own a percentage exceeding (20%) of the net assets value of the fund that its units were owned.
‌e) The investments of the REIT Fund Manager on the Parallel Market in usufruct rights shall not be subject to the restriction stipulated in sub-Paragraph (a) of sub-Paragraph (3) of Paragraph (b) of this Article.

4. Fund's assets requirements: with regards to Articles (35) and (36) of these Regulations, the Fund Manager must ensure the provision of valuation reports for the real estate, prepared by two accredited valuers, with the Saudi Authority for Accredited Valuers' fellowship, and publish them during the offer period on its website and the Exchange's website. The reports shall contain an assessment of market rents (where applicable) and the assessment period shall not exceed three months of the offering commencement date. Where more than two accredited valuers were appointed, the Fund Manager must publish all the accredited valuers' reports.

It is proposed to amend Article 46 in the draft amendment to the Real Estate Investment Funds Regulations regarding the Investment of Real Estate Investment traded Fund

Article 47: Offering Requirements for REITs
...
c) When submitting an application for offering, the Fund Manager must provide the Authority with a binding agreement to sell the real estate subject of investment or a binding agreement to transfer the real estate's interest, where the fund is investing in usufruct rights, as determined in the fund's terms and conditions, upon the completion of the fund units offering and before its listing.
d) When submitting an application for offering, the Fund Manager must provide the Authority with a memorandum of understanding between the Fund Manager and the company responsible for the property management or the lease contract, if agreed that the lessee is responsible for managing the property, as the case may be.
e) When submitting an application for offering, the Fund Manager must provide the Authority with the names of two receiving agents, at least.
...

Article 47: Offering Requirements for REITs
...
c) When submitting an application for offering, the Fund Manager must provide the Authority with the followings:
1) Binding agreement to sell the real estate subject of investment or a binding agreement to transfer the real estate's interest, where the fund is investing in usufruct rights, as determined in the fund's terms and conditions, upon the completion of the fund units offering and before its listing.
2) Memorandum of understanding between the Fund Manager, the developer, and the engineering office,) where applicable (.
3) Memorandum of understanding between the Fund Manager and the company responsible for the property management or the lease contract, if agreed that the lessee is responsible for managing the property, as the case may be.
4) Name of one receiving agent, at least.

...

- It is proposed to add a Subparagraph (2) of paragraph (c) of Article 47 in the draft amendment to the Real Estate Investment Funds Regulations.

- It was also proposed to amend Subparagraph (4) of paragraph (c) of Article 47 in the draft amendment to the Real Estate Investment Funds Regulations by using the phrase "name of one receiving agent" instead of " names of two receiving agents ".

Article 51: General Provisions
a)         All the provisions mentioned in these Regulations and the Rules for The Special Purposes Entities shall apply to Real Estate Investment Fund that takes the form of a special purposes entity unless these Regulations indicate otherwise.
b)         For establishing a Real Estate Investment Fund that takes the form of a special purpose entity, the fund manager must submit an application to establish a special purposes entity in accordance with the provisions contained in these Regulations and the provisions contained in the Rules for Special Purposes Entities as applicable.
c)         For the purposes of this Part, any reference to the “fund" in these regulations, the Capital Market Law and its Implementing Regulations, applies to “Real Estate Investment Fund that takes the form of a special purposes entity".

Article 51: General Provisions
a) All the provisions mentioned in these Regulations and the Rules for The Special Purposes Entities shall apply to Real Estate Investment Fund that takes the form of a special purposes entity unless these Regulations indicate otherwise.
b) For establishing a Real Estate Investment Fund that takes the form of a special purpose entity, the fund manager must submit an application to establish a special purposes entity in accordance with the provisions contained in these Regulations and the provisions contained in the Rules for Special Purposes Entities as applicable.
c) ‌The Manager of Investment Funds that takes the form of a special purpose entity must have the by-laws certified by the relevant authority before offering fund units.

d) For the purposes of this Part, any reference to the “fund" in these regulations, the Capital Market Law and its Implementing Regulations, applies to “Real Estate Investment Fund that takes the form of a special purposes entity".

It is proposed to add paragraph (c) to Article 51 in the draft amendment to the Real Estate Investment Funds Regulations; to obligate the manager of investment funds that take the form of a special purpose entity not to offer the fund's units until the by-laws have been certified by the relevant authority

ANNEX 2
Requirements for the Terms and Conditions of a Real Estate Investment Traded Fund

...
9) A summary of the Fund's strategies to achieve its objective, which includes at least the Following:
...
a) A table illustrating the fields of investments that the fund will be investing in, stating the minimum and maximum of the investment percentage.
…

‌d) A schedule of the following information for each real estate:
…
4. State / city;
5. Neighborhood / street;
…

ANNEX 2
Requirements for the Terms and Conditions of a Real Estate Investment Traded Fund

...
9) A summary of the Fund's strategies to achieve its objective, which includes at least the Following:
‌...
a) A table illustrating the fields of investments that the fund will be investing in, stating the minimum and maximum of the investment percentage.
…
d) A schedule of the following information for each real estate (where applicable):
…
4. Real estate address
…

(E) A clear project plan approved by the developer (where applicable).
…

- It is proposed to amend Subparagraph (D) of Paragraph (9) of Annex (2) in the draft amendment to the Real Estate Investment Funds Regulations by adding the phrase "where applicable" to the text of the Paragraph, to account for cases where the Paragraph may not apply, such as the fund's investment in real estate development.

- It is proposed to amend Subparagraphs (4) and (5) of Annex (2) in the draft amendment to the Real Estate Investment Funds Regulations by merging them into the phrase “real estate address".

- It is proposed to add a Subparagraph (E), to Paragraph (9) of Annex (2) in the draft amendment to the Real Estate Investment Funds Regulations, to account for cases of the fund's investment in real estate development.

ANNEX 4
CONTENTS OF FUND'S REPORTS

4. The percentage of rent amount for each asset in the total rent of the fund's assets.

ANNEX 4
CONTENTS OF FUND'S REPORTS

4. The percentage of rent amount for each asset in the total rent of the fund's assets (where applicable).

It is proposed to amend Paragraph (4) of Annex (4) in the draft amendment to the Real Estate Investment Funds Regulations by adding the phrase "where applicable" to the text of the Paragraph, to account for cases where the Paragraph may not apply, such as the fund's investment in real estate development.

ANNEX 6
Contents of the Quarterly Statement

The quarterly statement for REIT funds must contain the following information, as a minimum:
...
5. a list of names of all real estates consisting the fund's portfolio, and the percentage of the value of each property in the total assets, in addition to the occupancy percentage for each property as at the end of the relevant quarter.
6. the fund's total assets value.
7. the percentage of borrowing to the fund's total assets value, period for fulfillment and due date.
8. the fund units' net assets value.
9. the ratio of the fund's costs to the fund's total assets value.
10. any fundamental or non-fundamental changes that affects the fund's function during relevant quarter (where applicable).
11. a statement on the fund's dividends distributed to the unitholders, if any; by including the quarterly statement with details as follows:
a) Total dividends distributed in the relevant quarter.
b) The number of existing units for which distributions have been made during the relevant quarter.
c) The value of the dividends distributed during the relevant quarter for each unit.
d) The percentage of distribution from the fund's net asset value;
e) Eligibility for cash dividends distributed during the relevant quarter.
In addition to the above mentioned, the Fund Manager must disclose the previous sale or rent proceeds distributions for the same quarter of the previous year. Such disclosure shall enable the unitholders to view the fund's distributions and their number and size.

ANNEX 6
Contents of the Quarterly Statement

The quarterly statement for REIT funds must contain the following information, as a minimum:
...
5) a list of names of all real estates consisting the fund's portfolio, and the percentage of the value of each property in the total assets, in addition to the occupancy percentage for each property as at the end of the relevant quarter (where applicable).
6. If the fund acquires real estate during the relevant quarter, the following must be disclosed at a minimum:
A) Real estate assets to be owned during the quarter:
1. A detailed statement of the real estate assets to be owned.
2. A schedule of the following information for each real estate:
A. The name of the real estate;
B. The real estate owner(s) information;
c. real estate type;
D. real estate address;
E. Location (Croquis) map;
F. Land area;
G. Building area (according to the building permit);
H. Number of floors;
I. Types and numbers of units;
J. Occupancy rate of the real estate;
K. Completion date of the building construction (according to the construction completion certificate);
L. Cost of purchasing the real estate;
M. Brief description of the current leases;
N. Revenues for the last (3) years of the real estate, if any; and
O. Any additional information.
3. Funding source / mechanism for acquiring real estate assets.
4. Previous and targeted rental proceeds for each real estate/usufruct, and its percentage of the total rental income.
5. A table of the total and net targeted proceeds before and after increasing the fund's loans (where applicable).
6. Valuation of the assets to be acquired:
A table containing the following:
A. Real estate subject to acquisition.
B. Names of the accredited valuers.
C. Date of each valuation report.
D. Valuation price for each real estate.
E. Average valuation prices.
F. Purchase price of each real estate.
B) Additional risks related to the increase of the fund's loans (where applicable).
C) Insurance:
This section must include the assets that have been insured, the details of the insurance and the extent of its coverage.
D) Other information:
The inclusion of any significant information known (or supposed to be known) to the Fund Manager or Fund's Board at the time of issuing the Fund's Terms and Conditions.
E) The company that carries out Property Managements:
1. The name of the company that carries out the property managements and its address.
2. Statement of the property management company's tasks, duties and responsibilities.
3. Disclosure of whether the company that carries out the property managements intends to invest in the fund's units, and the value of these investments.
4. Any fees paid to the property manager.
7. The fund's total assets value.
8. The percentage of borrowing to the fund's total assets value, period for fulfillment and due date, and disclosure of details on the use of the loan.
9. The fund units' net assets value.
10. the ratio of the fund's costs to the fund's total assets value.
11. Any fundamental or non-fundamental changes that affects the fund's function during relevant quarter (where applicable).
12. A statement on the fund's dividends distributed to the unitholders, if any; by including the quarterly statement with details as follows:
a) Total dividends distributed in the relevant quarter.
b) The number of existing units for which distributions have been made during the relevant quarter.
c) The value of the dividends distributed during the relevant quarter for each unit.
d) The percentage of distribution from the fund's net asset value;
e) Eligibility for cash dividends distributed during the relevant quarter.
13. A clear course of business plan for the projects approved by the developer (where applicable).
In addition to the above mentioned, the Fund Manager must disclose the previous sale or rent proceeds distributions for the same quarter of the previous year. Such disclosure shall enable the unitholders to view the fund's distributions and their number and size.

- It is proposed to amend Paragraph (5) of Annex (6) in the draft amendment to the Real Estate Investment Funds Regulations by adding the phrase "where applicable" to the text of the Paragraph, to account for cases where the Paragraph may not apply, such as the fund's investment in real estate development.

- It is proposed to add a Paragraph (6), to Annex (6) in the draft amendment to the Real Estate Investment Funds Regulations, with a view to demonstrating information and data that enable unitholders to make an informed investment decision.

- It is proposed to amend Paragraph (8) of Annex (6) in the draft amendment to the Real Estate Investment Funds Regulations by adding a requirement to disclose details on the use of the loan.

- It is proposed to add a Paragraph (12) of Annex (6) in the draft amendment to the Real Estate Investment Funds Regulations, to account for cases of the fund's investment in real estate development.

Annex 13
Fund Termination Report

The fund termination report is used to provide relevant information regarding the process of the real estate investment fund's termination or liquidation.
The fund termination and liquidation report must contain all the information required under this Annex.

Content of the fund reports:

…
g) Financial statements:

The final audited financial statements of the real estate investment fund, for the period following the latest audited financial statements, must be prepared in accordance with the accounting standards approved by the Saudi Organization for Certified Public Accountants.

Annex 13
Fund Termination Report

Content of the fund reports:

…
g) Financial statements:

It is proposed to make drafting amendments to Paragraph (g) of Annex (13) in the draft amendment to the Real Estate Investment Funds Regulations.

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Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority

The Current Provisions	Provisions After Proposed Amendment	Clarification
Private Real Estate Fund: a private fund the objective of which is to invest in real estate, and it does not include funds that invest all of its assets outside the Kingdom.	Private Real Estate Fund: a private fund the objective of which is to invest in real estate.	It is proposed to amend the term definition in light of the proposed amendments to the draft Investment Funds Regulations.
__	Investment Fund Distribution Platform: It refers to any of the following: 1) Distribution platforms established by market infrastructure institutions. 2) Distribution platforms established by financial market institutions that hold the required license in accordance with the regulations and instructions issued by the Authority. 3) Distribution platforms that hold a financial technology Experimental Permit to engage in the distribution of investment funds and Real Estate Investment Funds.	It is proposed to add the term to the Glossary of defined terms used in the regulations and rules of the capital market authority in light of the proposed amendments to the Investment Funds Regulations and Real Estate Investment Funds Regulations, which include allowing Fund Managers to set an investment fund distribution platform.
Capital Protected Fund: an investment fund whose primary investment objective is to protect and return the capital invested by unitholders at a pre-determined date in the future.	Capital Protected Fund: an investment fund whose primary investment objective is to protect the capital invested by unitholders	It is proposed to amend the term "Capital Protected Fund" by removing the phrases "and return" and "at a pre-determined date in the future" in light of the proposed amendments to Article 7 of the draft Investment Funds Regulations
__	Venture Capital Fund: An investment Fund has the meaning specified in Article 86 of the Investment Funds Regulations	It is proposed to add the term “Venture Capital Fund" to the Glossary of defined terms used in the regulations and rules of the capital market authority in light of the proposed amendments to Article 86 of the draft Investment Funds Regulations.
Liquidation of the Fund: means wherever mentioned in the Investment Funds Regulations and the Real Estate Investment Funds Regulations, a maximum period of 6 months from the next day of the date for the Termination of the Fund, during which he assets of fund must be fully liquidated in accordance with the provisions of the Investment Funds Regulations and the Real Estate Investment Funds Regulations.	Liquidation of the Fund: means wherever mentioned in the Investment Funds Regulations and the Real Estate Investment Funds Regulations, a maximum period of 12 months from the next day of the date for the Termination of the Fund, during which he assets of fund must be fully liquidated in accordance with the provisions of the Investment Funds Regulations and the Real Estate Investment Funds Regulations.	It is proposed to amend the definition of the term “Liquidation of the Fund" in light of the amendment to Paragraph (I) of Article 22 in the draft amendment to the Investment Funds Regulations and Paragraph (t) of Article 43 in the draft amendment to the Real Estate Investment Funds Regulations, by extending it to 12 months instead of 6 months.

Last update: 26 January 2025

The Proposed Development of the Regulatory Framework for Investment Funds in the Kingdom

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Investment Funds Regulations

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Real Estate Investment Funds Regulations

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Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority

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