Saudi Arabia’s Capital Market Authority (CMA) has proposed new regulations that would require investment funds to provide more detailed disclosures regarding payouts, holdings, and property-generated revenues. The move aims to enhance transparency across the kingdom’s growing investment fund sector.
Under the proposed framework, funds would need to clarify the sources of their cash distributions, distinguishing between income derived from investments—such as dividends, rental income, and profit distributions—and capital gains realized from asset sales. This distinction is intended to help investors better evaluate the sustainability of fund payouts.
The CMA also plans to require quarterly statements detailing funds’ ten largest investments, including counterparties and the percentage each holding represents of net assets. For real estate funds, the proposals would mandate disclosure of revenue from individual properties, their share relative to net assets, sectoral breakdowns, remaining lease durations, and weighted average lease terms where applicable.
In addition to more frequent and detailed reporting, annual reports would need to include performance analyses comparing results against benchmarks, along with explanations of influencing factors and forward-looking expectations. Reports on public funds would be supplemented with risk assessments.
These proposals come amid notable growth in Saudi Arabia’s investment fund industry, which saw assets rise to SAR 1 trillion ($265.7 billion) by the end of June 2026, marking a 28.2 percent increase year on year. The number of funds also expanded by 29.6 percent to 2,249 during this period. Earlier in September, the CMA introduced guidance classifying funds into five risk categories ranging from low to high to facilitate clearer comparisons.
Industry experts have weighed in on the potential impact of the draft regulations. Aseed Al-Aranki, head of financial market analysis at CG Invest, highlighted the importance of distinguishing income sources in assessing payout sustainability. She noted that recurrent income streams like rents and dividends are generally more reliable over time compared to the one-off gains from asset sales. Al-Aranki added that enhanced transparency would increase accountability among fund managers regarding how distributions are funded.
Conversely, Assem Mansour, head of market research for the Middle East and North Africa at global trading platform HFM, cautioned that the proposed requirements could impose additional operational challenges for fund managers, particularly smaller firms. He emphasized that the success of the regulatory changes will hinge on the adoption of standardized reporting templates and definitions, a reasonable transition period for managers to adapt, and the provision of simplified summaries tailored for retail investors.
The CMA has opened the proposals for consultation as part of its broader efforts to strengthen governance and investor protection within Saudi Arabia’s capital markets.