Investment Funds Flashcards
6 cards from real CME-1 practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Investment Funds flashcards as text
What is the primary regulation governing investment funds in Saudi Arabia?
Answer: Investment Funds Regulations issued by the CMA
The Investment Funds Regulations (IFR) issued by the CMA govern the establishment, management, and operation of investment funds in Saudi Arabia. These regulations cover both public and private funds.
What is the difference between a public fund and a private fund under CMA regulations?
Answer: Public funds are offered to all investors, private funds are restricted to qualified investors
Public investment funds are offered to all investors and subject to stricter CMA regulations including prospectus requirements, while private funds are offered only to qualified or institutional investors with fewer regulatory requirements.
What is the minimum subscription amount for a private placement fund in Saudi Arabia?
Answer: SAR 50,000
Private placement funds in Saudi Arabia typically require a minimum subscription of SAR 50,000 or its equivalent. Investors must also meet the CMA's definition of a sophisticated or qualified investor.
What is an Exchange Traded Fund (ETF) and are they available on Tadawul?
Answer: A fund that tracks an index and trades on the exchange like a stock; yes, available
ETFs are investment funds that trade on Tadawul like stocks and typically track a specific index. Several ETFs are listed on Tadawul, including the Falcom Saudi Equity ETF and iShares MSCI Saudi Arabia ETF.
What fiduciary duties does a fund manager owe to fund investors under CMA regulations?
Answer: Duty of care, loyalty, and acting in the best interest of unitholders
CMA regulations require fund managers to act with duty of care, loyalty, and in the best interest of unitholders. They must avoid conflicts of interest, maintain fair treatment, and ensure adequate risk management.
What is a Real Estate Investment Trust (REIT) in Saudi Arabia?
Answer: A publicly traded closed-end fund that invests in income-generating real estate
Saudi REITs are closed-end investment funds listed on Tadawul that invest at least 75% of assets in income-generating real estate. They must distribute at least 90% of net income as dividends to unitholders annually.
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