CME-1 Investment Funds

Question 1

What is the primary regulation governing investment funds in Saudi Arabia?

Accepted Answer

Investment Funds Regulations issued by the CMA

Answer

Banking Control Law

Answer

Companies Law

Answer

Zakat and Income Tax Law

Question 2

What is the difference between a public fund and a private fund under CMA regulations?

Accepted Answer

Public funds are offered to all investors, private funds are restricted to qualified investors

Answer

Public funds invest in stocks, private funds invest in bonds

Answer

Public funds are larger than private funds

Answer

There is no regulatory difference

Question 3

What is the minimum subscription amount for a private placement fund in Saudi Arabia?

Accepted Answer

SAR 50,000

Answer

SAR 1,000

Answer

SAR 10,000

Answer

No minimum if investor qualifies

Question 4

What is an Exchange Traded Fund (ETF) and are they available on Tadawul?

Accepted Answer

A fund that tracks an index and trades on the exchange like a stock; yes, available

Answer

A fund traded only after market hours; not available

Answer

A fund that only invests in real estate; limited availability

Answer

A futures contract on the exchange; not yet introduced

Question 5

What fiduciary duties does a fund manager owe to fund investors under CMA regulations?

Accepted Answer

Duty of care, loyalty, and acting in the best interest of unitholders

Answer

Only the duty to maximize returns

Answer

Only the duty to follow the fund's strategy

Answer

No specific fiduciary duties apply

Question 6

What is a Real Estate Investment Trust (REIT) in Saudi Arabia?

Accepted Answer

A publicly traded closed-end fund that invests in income-generating real estate

Answer

A private real estate development company

Answer

A government housing program

Answer

A bank mortgage product