Saudi Arabia’s Capital Market Authority has opened a 30-day public consultation inviting stakeholders to comment on a draft permitting publicly offered financing investment funds, previously limited to private placements. The feedback window runs until September 10, 2025 (18/03/1447H).
The draft proposes a regulatory framework to support direct and indirect financing activities through publicly listed funds. It would allow these financing funds to list on both the Main Market and the Parallel Market, a privilege currently reserved for private placements. The move aligns with a broader strategy to expand asset management offerings, boost managed assets, and broaden financing options for public investors.
The framework also consolidates current provisions into a single regulatory document, enhancing clarity and investor protection. One key measure caps fund exposure to any single beneficiary, or entities within the same group, at 25% of the fund’s total size.
To limit risk exposure, the draft restricts fund activities to defined instruments: financing operations, money market transactions, bank deposits, and money market funds. It explicitly excludes high-volatility or illiquid assets.
Indirect fund activity must occur via legally supervised channels: funds may acquire financing portfolios from SAMA-regulated entities, form partnerships with SAMA-licensed firms for joint financing, or invest in such firms while allowing financing decisions to remain with the licensed entity.
The draft clarifies definitions: direct financing funds are those providing loans or investments to legal persons or funds; indirect funds engage through third-party financial institutions. These financing funds are structured to deliver consistent cash flows to unit holders while offering diverse returns and the prospect of public listing.
By end of 2024, the value of private financing funds stood at SAR 2.8 billion. The new framework is expected to catalyse AUM growth by enabling managers to raise larger, more diversified funds with wider investor reach and lower risk.
The CMA confirmed it would consider all feedback ahead of finalising amendments. Stakeholders can submit comments through the Public Consultation Platform, managed by the National Competitiveness Center.
