The Capital Market Authority Approves the Amendment of Real Estate Investment Traded Funds Instructions

​The Capital Market Authority's Board issued its resolution to approve the amendments on the Real Estate Investment Traded Funds Instructions ("Instructions"), after the  amended Instructions were published on the Authority's website for 15 days for public consultation and the Instructions shall be effective from its publication date.

It's worth mentioning that the Instructions were drafted in light of the best international practices in this regard. In addition, the Authority has taken into consideration the comments received from the public, discussed with the market participants and coordinated with the concerned parties in a manner that help in achieving the desired objectives of these Instructions, as the Authority attaches great importance to the asset management industry as one of the main securities businesses that the Authority regulates. The asset management industry contributes to the provision of diversified investment products, professional management of clients' assets and the enhancement of professional practices and institutional behavior in the market.

Some of the notable amendments are found in prohibiting persons whom their names, upon establishment, are stated in the fund's Terms and Conditions as holders of (5%) or more of the fund's units, from disposing of the units which they subscribed with during the first year of the trade commencement of the relevant fund, besides additional disclosure requirements, such as the disclosure of significant unitholders' dealings in the Exchange and including the market rents assessments to the Accredited Valuers Report and obliging the fund manager to publish it. In addition to the increase of the minimum amount for the fund's establishment from (100) million Saudi Riyals to become (500) million Saudi Riyals. Beside other amendments as demonstrated in the link below.

And the amended Instructions can be viewed via the following link:

التعليمات الخاصة بصناديق الاستثمار العقارية المتداولة

Real Estate Investment Traded Funds Instructions