Riyadh: The Capital Market Authority (CMA) called upon relevant and interested persons participating in the capital market to share their feedback on the Draft Amendments of Investment Funds Regulations for public consultation. The consultation period is open for 30 days, ending on July 12, 2024.

The draft aims to allow public funds to subscribe to debt instruments offered privately if issued by issuers within the Kingdom. This initiative is intended to facilitate the growth of the asset management industry by enabling public fund managers to subscribe to a larger number of debt instrument issuers, thereby removing the restrictions imposed under the Investment Funds Regulations.

This development is expected to increase the market's attractiveness to debt instrument issuers and enhance the appeal of fund investments in debt instruments by expanding the range of assets available for investment.

To enhance investor protection, the proposed draft requires money market fund managers and capital protection funds to invest no more than 10% of the fund’s net asset value in debt instruments issued by a single issuer. This measure aims to limit risks and increase the diversity of the fund’s portfolio.
According to the proposed draft, managers of public funds investing in debt instruments are required to disclose the credit rating of the debt instruments in the fund’s quarterly statement, enhancing disclosure and transparency levels for investors in those funds.

The draft is part of the CMA’s efforts to deepen the debt instruments market and increase its liquidity. This initiative aligns with the CMA’s strategic plan, which aims to elevate the Saudi market’s status and global ranking, thereby enhancing the capital market’s attractiveness and efficiency, and boosting its regional and international competitiveness. It also supports the capital market’s role in capital formation as one of its strategic directions, with key objectives including developing the sukuk and debt instruments market, increasing liquidity in this sector, and growing it to become one of the world’s leading emerging markets.

The authority emphasized that the comments of relevant and interested persons shall be taken into full consideration for the purpose of finalizing the draft. Opinions and comments can be submitted through the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Center, at: istitlaa.ncc.gov.sa, or via the prescribed form through the email: Laws.Regulations@cma.org.sa.