Key Takeaways
- • Saudi Arabia's Capital Market Authority (CMA) opened a 30-day public consultation on draft amendments to investment fund disclosure requirements, with feedback due by Nov. 17.
- • The draft covers the Investment Funds Regulations, the Real Estate Investment Funds Regulations, and the Glossary of Defined Terms used in CMA regulations and rules.
- • Proposed rules would require funds to disclose their 10 largest investments, including asset types, counterparties, and each holding's share of net asset value.
- • Real estate funds would have to disclose revenue per property, each property's percentage of NAV, and the sectoral distribution of their real estate assets.
- • The Exchange's website would become the mandatory primary channel for fund disclosures.
Summary
Saudi Arabia's Capital Market Authority (CMA) has invited investors and capital market participants to comment on proposed amendments to investment fund disclosure requirements, according to a statement from the regulator. The consultation covers a draft framework amending the Investment Funds Regulations, the Real Estate Investment Funds Regulations, and the Glossary of Defined Terms Used in the CMA's Regulations and Rules. The consultation period runs for 30 days, ending on Nov. 17.
The CMA said the amendments aim to enhance transparency, improve supervisory efficiency, and improve the quality of information available to investors so they can make informed investment decisions. The draft consolidates existing ongoing disclosure and announcement obligations into a single section of the regulations to make requirements clearer. It also proposes changes covering conflicts of interest, specific events, annual and periodic reports, and fund terms and conditions.
For annual and periodic reports, the draft would require additional details on distributions to unitholders, clarifying their sources and nature, including distributions from fund investments and capital gains realized from asset sales. Funds would also have to disclose their 10 largest investments, including asset types, counterparties, and each investment's share of the fund's net asset value. Real estate funds would be required to report revenue generated by each property, its percentage of fund NAV, and the sectoral distribution of their real estate assets. For annual reports, the draft proposes a detailed analysis of fund performance, including comparisons with benchmark indices, explanations of performance drivers, forward performance expectations, and a risk assessment report for public funds.
The proposal would also make the Exchange's website the mandatory primary channel for publishing disclosures, while allowing funds to publish on additional websites. The CMA said it will fully consider public feedback when finalizing the amendments.
The CMA said the amendments aim to enhance transparency, improve supervisory efficiency, and improve the quality of information available to investors so they can make informed investment decisions. The draft consolidates existing ongoing disclosure and announcement obligations into a single section of the regulations to make requirements clearer. It also proposes changes covering conflicts of interest, specific events, annual and periodic reports, and fund terms and conditions.
For annual and periodic reports, the draft would require additional details on distributions to unitholders, clarifying their sources and nature, including distributions from fund investments and capital gains realized from asset sales. Funds would also have to disclose their 10 largest investments, including asset types, counterparties, and each investment's share of the fund's net asset value. Real estate funds would be required to report revenue generated by each property, its percentage of fund NAV, and the sectoral distribution of their real estate assets. For annual reports, the draft proposes a detailed analysis of fund performance, including comparisons with benchmark indices, explanations of performance drivers, forward performance expectations, and a risk assessment report for public funds.
The proposal would also make the Exchange's website the mandatory primary channel for publishing disclosures, while allowing funds to publish on additional websites. The CMA said it will fully consider public feedback when finalizing the amendments.
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