CMA Approves New Rules to Protect Investors

Saudi Arabia's Capital Market Authority approved in July 2025 a set of regulatory enhancements aimed at strengthening investor protection and improving efficiency across the Kingdom's capital market. The measures cover fund subscriptions, governance, distribution channels and foreign investor access.

Under the new rules, cash subscriptions by retail investors in a private fund must not exceed 50% of total cash subscriptions at the time units are offered. A similar 50% cap applies to retail contributions in foreign funds offered in the Kingdom, a step designed to reduce concentration risk for smaller investors.

For money market and capital protection funds, exposure to a single debt instrument is capped at 10% of net assets, while total exposure to a single entity is limited to 25%. Real estate investment funds and REITs traded on the parallel market (Nomu) will be allowed to invest in development projects without initial asset or percentage restrictions, adding flexibility while remaining under the Authority's oversight.

Stronger governance and wider access

Any change of fund manager will now require approval from the Authority and a 60-day transition period to safeguard unitholders. The Authority has also developed compensation funds for those affected by market violations, with three funds established and more than 20,000 investors benefiting under approved distribution plans. In addition, digital platforms and electronic money institutions licensed by the Saudi Central Bank may now distribute investment fund units, broadening access for retail investors within regulated channels.

From 1 February 2026, the market will open to all categories of foreign investors for direct investment in the Main Market, ending previous qualification requirements. The Qualified Foreign Investor concept will be abolished for the Main Market, and swap agreements will be eliminated so foreign investors can invest directly in listed shares. Separately, draft enhancements under consultation propose reducing the minimum capital for custody activity from SAR 50 million. Together, the changes aim to give residents, expats and international investors a clearer, better-protected path into Saudi Arabia's growing market.

---

Stay updated with the latest news, events, sports updates, business insights, real estate and lifestyle stories on Saudi Living — the leading online platform for residents, expats, and visitors in Saudi Arabia.

Follow Saudi Living for daily updates:

• Instagram - @saudiliving
• X - @saudiliving
• Facebook - @saudiliving
• YouTube - @saudiliving