In the Kingdom, the distributor is the placement.

The Investment Funds Regulations of the Capital Market Authority, as amended by the resolutions of May and July 2025, settle the question of foreign funds in one article: their securities may not be offered in the Kingdom except through a distributor, and the offer must be a private placement. Everything a foreign manager can do in the Kingdom follows from that sentence, and most of what it cannot do follows from it too. The distributor is neither an intermediary added for convenience nor a local agent who papers a subscription the manager has already agreed. It is the person who makes the offer, notifies the regulator, conducts the diligence, files the documents, reports the results and carries the relationship afterwards, and a structure marketed into the Kingdom is designed around it from the first approach.

This note sets out who may distribute and under what licence, what the distributor does before, during and after the offer, who may be placed to under the glossary's definitions, the secondary-transfer rule, what the manager cannot do, the distributor's continuing duties and the ninety-day notice, the documents and the required statement, the regulator's powers in the notification period, the Kingdom-established private fund's parallel rules, a comparison, a worked placement as a type, cases, what each party holds, the sequence, questions, terms and what to read.

Who may distribute

A distributor is a capital market institution licensed for dealing, or licensed for managing investments and operating funds. Those are the two licences whose holders may offer a foreign fund's securities. An institution licensed only for managing investments may distribute a foreign fund in one case: where the fund is established by that institution or by an affiliate under equivalent oversight in a recognised jurisdiction, and foreign investors own at least half of the fund's units. That exception is for the Saudi affiliate of an international manager distributing its own group's funds, and it does not reach a third-party manager.

A foreign manager without a Saudi affiliate therefore appoints a Saudi-licensed dealer or fund operator. The appointment is a contract with duties on both sides: the distributor's to notify, to diligence, to file, to report and to confine the offer to permitted persons; the manager's to supply the documents, the diligence material, the fundamental-change notices and the results. The contract also settles the commercial terms between them, which are the distributor's and the manager's business and appear on no surface.

Before the offer

The distributor notifies the regulator on the prescribed form at least fifteen days before the offer begins. The notification carries a declaration in the prescribed form, copies of the offering documents, and confirmation that the distributor has conducted diligence on the fund and its manager, the results of which the regulator may call for within five days of asking. The fifteen days run from a complete notification; an incomplete one restarts the clock when completed.

During the fifteen days the regulator may object to the offer, may issue a notice prohibiting it, or, where the distributor requests one, may issue a notice of no objection. Silence at the end of the period is not an approval; it is the absence of an objection, and the offer may proceed on the distributor's own responsibility for its compliance.

During the offer

The distributor ensures the offering documents carry the statement the regulations require for the securities of a foreign fund, in the form the regulations prescribe, and that the documents are those filed with the notification. It ensures the offer goes only to persons to whom a private placement may lawfully be made, and that any advertisement is confined to those persons. It records each approach and each subscription. It answers the regulator's questions.

After the offer

Within ten days of the close the distributor files a statement of results. Its duties then continue for the life of the relationship. It reports to the regulator as the regulations require. It notifies the regulator of fundamental changes to the fund: a change of manager, of investment policy, of the fund's status in its home jurisdiction. On an open-ended fund it gives ninety days' notice before its relationship with the foreign manager ends, so that a manager who wants to change distributors sequences the change around that notice and has the successor in place before it runs out. A foreign fund with Saudi holders and no distributor is a fund whose continuing duties nobody is discharging.

Who may be placed to

The private placement is defined by the recipient's category under the glossary as revised in 2025. An institutional client is a government or supranational body, a government-owned company, a legal person with net assets above fifty million riyals, a securities officer of such a person, a wholly owned subsidiary of one, an investment fund, or a counterparty. A qualified client is a natural person who meets one of several tests: a trading record of ten transactions a quarter over twelve months totalling forty million riyals; net assets of five million riyals or more; three years' professional work in the financial sector; a recognised securities certificate; or the general securities qualification together with an income of six hundred thousand riyals for two years. A qualified client is also a discretionary client of a capital market institution, in which case the offer is made to the institution, and a legal person with net assets between ten and fifty million riyals. A retail client is neither, and cannot be placed to.

The categories are tested by the distributor on evidence, and the distributor's classification is the one the Kingdom's regime relies on. The manager's own classification of the same holder under the centre's rulebook is a second record for the fund's tier, and the two sit side by side.

The glossary's tests, read for a register

A manager reads the glossary against its intended Saudi register holder by holder, because the categories decide who the distributor can approach at all. A sovereign investment institution is institutional as a government body. A government-owned company is institutional by ownership. A listed or private company is institutional if its net assets exceed fifty million riyals on its accounts, and qualified if they sit between ten and fifty million; below ten million it is retail and cannot be placed to at all, however large its proposed commitment. A family office holding through a company is read on the company's net assets. A family member investing in their own name is read on the natural-person tests: five million riyals of net assets, or the trading record, or the professional experience, or the certificates. A Saudi bank's discretionary client is reached through the bank. The register written first tells the manager which intended holders the distributor cannot approach, and those holders are not approached by anyone, in the Kingdom or from the centre, because an approach from the centre to a Saudi resident is an offer in the Kingdom.

The secondary-transfer rule

Securities of a foreign fund placed privately may be transferred inside the Kingdom only to existing holders of the fund's securities, to institutional or qualified clients, or in transactions of two hundred thousand riyals or less. A holder who wants to sell a position is inside the same regime as the manager who first placed it, and a transfer outside the three limits is an offer the distributor should have made. The constitution's transfer provision is drafted to the rule, and the manager's consent to a transfer to a Saudi buyer is conditioned on the buyer's category evidenced by the distributor or on the lot size.

What the manager cannot do

It cannot shorten the fifteen days by starting early, because the conversations that start early are the offer. It cannot approach the investor while the distributor notifies, because the notification covers the distributor's offer and not the manager's. It cannot treat an investor's own approach as outside the regime, because the regulations define the offer by what is offered rather than by who spoke first, and the Kingdom's regime contains no reverse-solicitation exemption in the form a manager from elsewhere expects. It cannot advertise, present or send a document to a room that contains one person outside the categories. It cannot forget the distributor after close, because the distributor's duties continue and the manager's conduct is what the distributor reports on. And it cannot paper a subscription the manager agreed in principle before the notification, because the offer was made when the principle was agreed.

The documents and the required statement

The offering documents filed with the notification are the documents used in the offer, and they carry the statement the regulations prescribe for a foreign fund's securities, in the prescribed wording, in the prescribed place. The documents also carry, as for other jurisdictions' holders, the disclosures the regulations require of foreign fund securities offered in the Kingdom. A memorandum drafted for the centre's tier and sent to the distributor without the statement is returned, and the fifteen days run from the corrected filing. The subscription agreement carries the subscriber's representation of its category and its acknowledgement of the statement, drafted by Saudi counsel.

Why the regime is built this way

The Kingdom's regime puts a licensed Saudi institution between every foreign fund and every Saudi investor, and it does so for reasons a manager should understand rather than resent, because the reasons shape what the distributor will and will not do. The regulator cannot supervise a foreign manager; it can supervise a Saudi licensee. By making the licensee the offeror, the regulator makes the licensee responsible for the offer's compliance, for the diligence on the fund, for the classification of the subscribers and for the continuing information it receives about the fund. The licensee's licence is the regulator's lever, and the licensee behaves accordingly: it will not file a notification it cannot stand behind, will not approach a person it cannot classify, and will not continue a relationship with a manager that does not keep it informed.

The manager who understands that treats the distributor as a regulated counterparty with its own exposure rather than as a sales channel. It supplies what the distributor needs to discharge its duties, on time, in full, and it accepts that the distributor's compliance function has the final word on whether a particular subscriber, a particular document or a particular approach goes forward. A manager that argues with the distributor's compliance function is arguing with the regime.

The regime also explains the continuing duties. The regulator wants to know, for as long as Saudi investors hold a foreign fund, that somebody it supervises is watching the fund and will tell it when something fundamental changes. The ninety-day notice on an open-ended fund exists so that there is never a period in which Saudi holders of a redeemable security have no supervised party attached to it.

The diligence pack

The distributor's diligence is a regulatory duty and it is discharged on documents, so the manager assembles the pack before the appointment. The fund's constitution and memorandum, in the form they will be offered. The fund's notification or registration in its home centre, with the regulator's record. The manager's licence in the centre, with its scope, and the regulator's confirmation that it is in good standing. The manager's audited accounts for the periods the distributor requires, and its ownership chain to the individuals who control it. The providers: administrator, custodian, auditor, valuer, each with its eligibility. The track record in the form the centre's rules permit it to be stated. The conflicts and the allocation policy. The tax and legal opinions the fund relies on, in summary. And the manager's own compliance arrangements, which the distributor reads because it is relying on them.

A distributor that receives the pack complete runs its diligence in weeks. One that receives a memorandum and a licence runs it in a quarter, with a list of requests, and the fifteen-day clock does not start until the diligence is done.

The approaches, recorded

The distributor records each approach: the person, its category and the evidence, the date, the documents provided, the version, and the outcome. The record is the evidence that the offer went only to permitted persons, and it is what the regulator reads if it inquires. The manager's own staff make no approaches, and where they attend a meeting at the distributor's invitation the record shows the distributor's invitation and the distributor's presence. A manager that cannot resist approaching a Saudi institution it knows has made an offer outside the regime, and the distributor's record will not show it, which is worse than showing it.

The record also governs the count of persons approached for any other purpose the manager may have, and the manager's own placement file holds the distributor's record as the Saudi placement record.

Advertisements and presentations

The regulations confine advertisements for privately placed securities to persons to whom a private placement may lawfully be made. An advertisement is anything that invites or induces: a presentation, a brochure, a web page reachable from the Kingdom that names the fund, an interview in which the manager describes it. A conference presentation in a centre to a room that includes a Saudi resident who is not institutional or qualified is an advertisement to a person outside the categories. The distributor's discipline, and the manager's, is that nothing about the fund reaches any Saudi person except through the distributor to a classified person, and that the manager's general communications, its website, its press, describe the manager and not the fund.

The transfer provision, drafted

The constitution's transfer provision carries, for a Saudi holder, the secondary-transfer rule in terms. The manager's consent to a transfer by a Saudi holder, or to a Saudi buyer, is conditioned on one of three things evidenced to the manager's satisfaction: that the buyer is an existing holder of the fund's securities; that the buyer is an institutional or qualified client under the glossary, evidenced by the distributor's classification; or that the transaction does not exceed two hundred thousand riyals. The provision also states that the manager may refer the transfer to the distributor, and that the seller bears the distributor's involvement. A provision drafted from the centre's precedent, permitting transfers to professional clients on the manager's consent, has permitted what the Kingdom's rule forbids, and the administrator will register a transfer the regulations do not allow.

The open-ended fund's particular position

An open-ended foreign fund with Saudi holders is a fund whose Saudi holders may redeem, and the regime treats the distributor's continuing relationship as essential to them. The ninety-day notice before the distributor ends the relationship is the regime's protection. A manager of an open-ended fund who wishes to change distributor appoints the successor, has the successor notify its own offer or its assumption of the relationship as the regulations require, and only then lets the predecessor's notice run. A manager who lets the predecessor go first has a period in which its Saudi holders have a redeemable security and no distributor, and the regulator reads that period as the manager's.

The Kingdom-established private fund

A private fund established in the Kingdom under the same regulations mirrors the foreign fund's regime for its own placement: the same private placement test, a fifteen-day notification, and prescribed annexes. A Saudi private real estate fund that a land platform uses as its permitted holder is placed under those rules by its own Saudi-licensed manager, and the foreign platform above it is a unitholder admitted under them.

By step · by party	The manager	The distributor	The regulator
Appointment	Contracts with a licensed dealer or fund operator	Accepts, on its own diligence	None
Diligence	Supplies the formation documents, licence, accounts, providers	Assesses the fund and the manager	May call for the results within five days
Notification	Supplies the offering documents with the required statement	Files at least fifteen days before the offer, complete	May object, prohibit or issue a no-objection
The offer	Makes no approach	Offers to institutional and qualified clients only; records each	May inquire
Close	Supplies the results	Files the statement within ten days	Receives it
Afterwards	Notifies the distributor of fundamental changes	Reports; notifies changes; ninety days' notice to end	Supervises

Where it surfaces

At the first approach, when the manager's team meets a Saudi institution before the distributor is appointed and the conversation becomes the offer.

At the notification, when the regulator objects to a document that lacks the required statement and the clock restarts.

At the close, when the distributor's compliance function declines a subscriber whose category it cannot evidence.

In year two, when a fundamental change is not notified because the manager treated the close as the end of the relationship.

At the transfer, when a Saudi holder sells to a buyer the rule does not permit and the administrator registers it.

At the successor fund, when the manager assumes the first fund's notification covers the second.

A timeline, as a type

Month one: the distributor is appointed and the diligence pack supplied. Months one to two: the distributor's diligence, with two requests for further documents. Month two: the required statement and the representations drafted into the documents. Month three: the notification filed complete with a no-objection request; the regulator issues the no-objection on day twelve. Months three to four: the distributor's approaches, each recorded; the manager attends two meetings at the distributor's invitation. Month four: first close; the results statement within ten days. Year two: a change of custodian notified to the distributor, which notifies the regulator. Year three: a Saudi holder's transfer to an institutional buyer, evidenced by the distributor. Year four: the successor fund; the same distributor, a new diligence on the new fund, a new notification, a new record.

A placement, as a type

A manager in one of the centres appoints a Saudi distributor in the first month of its raise, before the memorandum is final. The distributor's diligence runs for six weeks on the fund's formation documents, the manager's licence and accounts, and the providers. The distributor drafts the required statement into the memorandum and the Saudi representations into the subscription agreement. The notification is filed complete twenty days before the intended first close; a no-objection is requested and issued in the period. The distributor approaches the Saudi institutions on the manager's list, each classified as institutional on evidence, records each approach, and takes the subscriptions at first close. The results statement is filed within ten days. A year later the manager changes its investment policy, and the distributor notifies the change. Three years later a Saudi holder wishes to sell half its position; the constitution conditions consent on the buyer's category, the distributor evidences it, and the transfer is registered.

Four cases, as types

A manager's placement team meets a Saudi pension institution at a conference in one of the centres and agrees terms in principle; the distributor is appointed afterwards to paper the subscription. The offer was made by the manager, outside the regime, before any notification, and the distributor's notification, filed afterwards, describes an offer that had already been made by somebody else.

A distributor files a notification with a memorandum that lacks the required statement for foreign fund securities. The regulator objects; the fifteen days restart from the corrected filing; the first close moves by a month, and the Kuwaiti permit obtained for the same close lapses before the second.

A manager appoints a distributor, closes, and never hears from it again. The manager changes its investment policy in year two and tells its holders; the distributor, not told, does not notify the regulator; the fundamental change is discovered at the regulator's review of the distributor, which reports the manager's failure to inform it.

A manager appoints the distributor at drafting, gives it the diligence pack, lets it draft the statement and the representations, files a complete notification with a no-objection request, takes its Saudi subscriptions through the distributor alone, files the results in the window, and keeps the distributor informed of every change. The Saudi holders are on the register lawfully on every day they are asked about.

What each party holds

The manager holds the appointment, the diligence pack, the documents, the duty to inform the distributor of changes, and the constitution's transfer provision drafted to the secondary rule.

The distributor holds the licence, the notification, the diligence, the offer, the classification of each subscriber, the results statement and the continuing duties.

Saudi counsel holds the required statement, the representations and the reading of the glossary.

The regulator holds the notification period, its powers in it and its supervision afterwards.

The subscriber holds its category, evidenced to the distributor, and its acknowledgement of the statement.

The sequence

1. The distributor is appointed at the memorandum's drafting stage.
2. The diligence pack is assembled from the fund's formation documents and supplied.
3. The required statement and the Saudi representations are drafted into the documents by Saudi counsel.
4. The notification is filed complete at least fifteen days before the offer, with a no-objection requested.
5. Every approach to a Saudi person is the distributor's and is recorded.
6. The results statement is filed within ten days of close.
7. Fundamental changes are notified to the distributor as they occur; any change of distributor is sequenced around the ninety-day notice.
8. The transfer provision is drafted to the secondary-transfer rule.

Questions a manager asks

Can the manager's own staff attend the distributor's meetings. They may attend to answer questions about the fund at the distributor's invitation; the offer is the distributor's, and the record shows the distributor making it.

What counts as a complete notification. The prescribed form, the declaration, the offering documents with the required statement, and the confirmation of diligence, all in the form the regulator's annexes prescribe; the distributor knows the list.

Is a no-objection necessary. It is not required; the offer may proceed on the absence of an objection. A no-objection is evidence the manager's own file and the lender's diligence will value, and distributors request it.

Does the rule reach a Saudi holder's subscription through a feeder in a centre. The feeder's securities are a foreign fund's securities offered to a Saudi person, and the distributor rule applies to the feeder's placement.

What if a Saudi investor is a discretionary client of a capital market institution. The offer is made to the institution, which is a qualified client for that purpose, and the institution's own duties to its client are the protection.

Can the distributor be changed. On notice, with the successor's notification filed before the predecessor's ninety days run out on an open-ended fund, and with the manager's continuing-duty obligations transferred.

Terms used

Distributor: the Saudi-licensed capital market institution through which a foreign fund's securities are offered.

Capital market institution: a person licensed by the Capital Market Authority for one or more securities activities.

Institutional client and qualified client: the glossary categories to whom a private placement may be made.

Notification: the distributor's filing at least fifteen days before the offer.

No-objection: the regulator's notice, on request, that it does not object to the offer.

Results statement: the distributor's filing within ten days of close.

Fundamental change: a change to the fund the distributor must notify to the regulator.

Secondary transfer: the sale of existing securities, confined to existing holders, institutional and qualified clients, or small lots.

What to read

The Investment Funds Regulations, part six, on foreign funds: the distributor requirement, the notification, the documents, the advertisements, the distributor's continuing duties and the secondary transfers; the glossary's definitions of institutional, qualified and retail client; the annexes prescribing the forms. On this site, the Kingdom's marketing room in the onshore interfaces and the marketing room under Jurisdictions.