Saudi Arabia’s Amended Investment Fund Rules 

Saudi Arabia’s revised investment fund rules aim to improve investor protections, cap fund manager fees, expand digital distribution, and simplify access for foreign investors. 

Saudi Arabia has made some changes to its investment fund rules. The new amendments, issued by the Capital Market Authority (CMA) on July 9, 2025, apply with immediate effect across all fund types, including public, private, and foreign funds.  

Alongside understanding these reforms, let us also look at CMA’s investment account opening procedures for qualified foreign investors, Gulf residents, and legal entities. 

Fund distribution opens to fintech and cross-border offerings 

The updated regulations now permit licensed electronic money institutions and fund distribution platforms to offer investment fund units online, including through mobile applications. This widens the entry points for retail investors and supports the broader fintech ecosystem the Kingdom is developing. 

Fund managers licensed to handle investment activity in Saudi Arabia are now also allowed to distribute foreign funds, bringing offshore investment products within reach of local investors, but this is subject to compliance conditions. 

Manager withdrawal and fee caps now formally regulated 

For the first time, the CMA has codified the process for voluntary withdrawal by fund managers. Managers must now observe a 60-day handover period to ensure a stable transition. In cases where the CMA intervenes and terminates a manager’s role, all fee charges must cease immediately. 

The regulator now has gained the power to cap service fees and commissions. This creates a framework to prevent overcharging, particularly for retail-oriented public funds. 

New investor protections through disclosure and reporting 

Public fund managers must now disclose the credit ratings of their top ten debt holdings in quarterly financial statements. From now onwards, any fund liquidation event or unitholder meeting has to be accompanied by pre-published agendas and supporting documents on public platforms. 

The CMA is expecting these transparency requirements to reduce information gaps and ensure that investors, especially smaller participants, can make informed decisions. 

Reporting timelines and accounting standards tightened 

Fund managers are now required to prepare both interim and annual reports in accordance with norms set by Saudi Organization for Chartered and Professional Accountants (SOCPA), Saudi Arabia’s official accounting standard. The liquidation periods following a fund’s expiry have been extended from six to twelve months, allowing for more orderly closure procedures. 

On the other hand, the management of investor registers has been decentralized. The fund managers can now appoint either a licensed capital market institution or a recognized fund distribution platform to maintain unitholder records, provided a formal agreement is already in place. 

Updated rules for specific fund structures 

The updated regulations introduce differentiated compliance requirements across various fund structures. Public funds are now permitted to invest in privately placed debt instruments issued within Saudi Arabia. This allows them access to non-public offerings previously out of reach. These funds must also measure performance against independent benchmark indices to enhance transparency. 

For private and foreign funds, retail investor participation has been capped at 50 percent of total contributions at the time of unit offering. In the case of closed-ended private funds, this ceiling also applies to unit transfers, retail holdings cannot exceed half of the fund’s value at any time. 

Money market and capital protection funds are subject to tighter exposure limits. These funds cannot invest more than 10 percent of their net asset value in instruments issued by a single debt issuer, and their total exposure to any one entity is now capped at 25 percent. This change is intended to limit concentration risk. 

Closed-ended traded funds are no longer allowed to dispose of in-kind contribution units to artificially inflate their asset values. The prior rule, which allowed disposals up to five percent, has been removed altogether. 

Special purpose entity (SPE) funds must now have their by-laws formally certified by the relevant authority before they can offer units. This requirement intends to bring greater legal accountability to these investment vehicles. 

Feeder funds are now barred from investing in private investment funds, adding to the existing prohibition on placing capital in other feeder funds. The supposed aim is to avoid complicated structures that make risk exposure tracking and assessments difficult. 

And the real estate funds listed on the Nomu parallel market that invest in development projects will be exempt from certain investment ratios and asset allocation restrictions under the broader REIT framework.  

Expanded investor categories and streamlined account procedures 

In addition to amending the Investment Funds Regulations, Saudi Arabia’s Capital Market Authority (CMA) also has specific instructions for opening investment accounts.  

Under its framework, Saudi natural persons can open accounts with national ID verification. And the citizens of Gulf Cooperation Council (GCC) member states can use either their passport or national ID. Foreign residents in Saudi Arabia need to provide a valid Iqama (residency permit) or diplomatic credentials, while individuals with five-year residency cards are also eligible. 

The rules extend further for foreign individuals residing in the GCC. They are now permitted to open accounts for direct investment in securities allowed under the Capital Market Law, including main market shares, a shift from earlier restrictions that limited their access to debt, derivatives, and swap-based arrangements. 

Qualified foreign investors not residing in Saudi Arabia or the GCC can also participate by verifying valid passport information and meeting criteria under the existing foreign investment framework. These changes are intended to simplify onboarding and improve Saudi Arabia’s attractiveness as a financial destination. 

Legal entity compliance and documentation requirements 

The CMA’s investment account rules also detail procedures for legal persons, both domestic and foreign, who are wishing to invest in Saudi capital markets. 

The Saudi and GCC companies are required to be incorporated under applicable company laws and provide proof of eligibility to invest in securities. When the investor is a listed company (or its affiliate), additional conditions apply on them: their board resolutions must outline investment limits and control measures, and a management contract with a licensed capital market institution must ensure full segregation of investment decision-making. These contracts must be reported to the CMA upon signing. 

Foreign legal entities may also open investment accounts to invest directly in approved securities or engage in swap agreements. The fund managers from the Kingdom or other GCC states also need to furnish corporate documents, regulatory authorizations, fund terms and conditions, and resolutions confirming who is authorized to operate the account. 

Updated regulatory definitions and framework integration 

To support the updated rules, the CMA has issued a revised Glossary of Defined Terms Used in the Regulations and Rules of the Capital Market Authority. The updated glossary contains new terminology introduced in the amended Investment Funds Regulations to help managers and auditors understand the changes better. 

What do Saudi Arabia’s amended investment fund rules mean for fund managers and investors 

Fund managers will need to update governance practices, adjust fee structures, and reinforce disclosure policies to align with the new regulatory framework. Those managing multiple fund types, particularly feeder or private vehicles, will have to revisit compliance benchmarks and investor composition. 

The distribution platforms and digital providers now have an easier path to offering funds directly to retail investors, but they need to implement secure, CMA-compliant onboarding and disclosure systems. 

For foreign investment firms, the changes create new routes to enter the Saudi market, both as fund providers and as investors in Saudi-listed equities. 

In brief 

The Saudi government is making it easier for retail and foreign investors to participate while holding fund managers to higher standards of transparency and investor protection. 

Participation thresholds, fee controls, and disclosure timelines have now been formalized. The updated regulations, along with the account-opening procedures and glossary, can help Saudi Arabia provide secure environment for investment and fund management. 

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