Funds established outside Saudi Arabia may only be offered to investors in the Kingdom by way of a private placement, and only then if:
- the offer is made through a distributor that is an entity authorised by the CMA to conduct dealing as agent activities; and
- the foreign fund’s manager is authorised in a jurisdiction that employs regulatory standards and requirements at least equivalent to those of the CMA, with the CMA having discretion to assess whether that is the case.
The distributor has a number of specific responsibilities for foreign funds, including: (i) conducting a detailed comprehensive review of the foreign fund and its manager before the distribution of units, and (ii) making available to unitholders in the Kingdom the same documentation which is made available by the fund manager to unitholders of the same class in other jurisdictions.
The team at Z&Co. has extensive experience advising fund managers and investors on the offering of both local and foreign funds to investors in the Kingdom. Recent instructions include:
- the SoftBank Vision Fund on the multi-billion dollar investment by the Public Investment Fund;
- a family group as the majority investor in a Saudi-listed specialist healthcare investment fund;
- various global financial institutions on the requirements to offer their funds in Saudi Arabia; and
- a listed real estate investment fund on a Shari’ah compliant bank financing.