Saudi Arabia’s Capital Market Authority (CMA) has proposed requiring investment funds to disclose their 10 largest investments and the sources of the distributions they pay to unitholders, under draft rules put out for public consultation on Sunday.
The 30-day consultation runs until November 17, Argaam reported. It covers draft amendments to the Investment Funds Regulations, the Real Estate Investment Funds Regulations and the glossary of defined terms used in the CMA’s rules.
Under the draft, annual and periodic reports would have to set out the sources and nature of distributions, including income from fund investments and capital gains realized from asset sales.
Funds would disclose their 10 largest investments, with asset types, counterparties and each investment’s share of net asset value. Real estate funds would also report the revenue generated by each property, its share of net asset value and the sector split of their real estate assets.
Private equity and venture capital funds would disclose each investee company, the fund’s stake and its latest valuation, EnterpriseAM reported. On any exit, they would report the value realized, the share sold and the return made.
Closed-ended traded funds would have to disclose a material transaction once it reaches 5% of net assets, down from 10%, according to EnterpriseAM. Fund managers would also publish a summary of each conflict of interest, naming the parties, the impact and the action taken.
Annual reports would add a detailed analysis of fund performance, including comparisons with benchmark indices and the factors that affected results. Public funds would also include a risk assessment report.
The draft would make the Saudi Exchange website the mandatory primary channel for fund disclosures, while still allowing funds to publish on other websites.
The CMA said the changes aim to improve transparency and supervisory efficiency and to give investors better information for their decisions. It said it would take public feedback into account before finalizing the amendments.
