Article 41: Investments Areas

Article 41: Investments Areas

a. The assets and money of a public fund must be invested in investments in accordance with these Regulations, other applicable laws and regulations, and the Fund’s Terms and Conditions.

b. The fund manager must invest the assets and money of a public fund, in the following types of investments only:

1) securities;

2) money market transactions concluded with a party subject to Saudi Central Bank supervision or equivalent regulator to the Saudi Central Bank in a jurisdiction outside the Kingdom;

3) Bank deposits with a local bank or institution regulated by an equivalent regulator to the Saudi Central Bank in a jurisdiction outside the Kingdom;

4) real estate assets, without prejudice to the provisions of Paragraph (h) of this Article; and

5) commodities.

c. The fund manager may not invest the money and assets of a public fund in securities issued by the fund manager or its affiliates unless this is permitted by the Terms and Conditions of the relevant public fund.

d. The subscription monies received from a unitholder may not be placed on deposit which is not invested with an affiliate of the fund manager other than on Terms and Conditions equivalent to at least the terms entered into by persons dealing at arm’s length.

e. With regards to the provision of Paragraph (b) of this Article, the public fund manager may not lend the fund’s assets or money to any person, except in these two cases:

1. The lending of securities by a closed-ended public fund.

2. The lending of securities by an open-ended public fund in a maximum of )30%( of the fund’s net assets value.

f. The fund manager may not invest the public fund's money and assets in any type of assets that would result in the fund assuming, guaranteeing, endorsing or otherwise become directly or contingently liable for any obligation or indebtedness of any person.

g. The public fund’s money and assets may not be used to acquire any asset that involves the assumption of any liability which is unlimited.

h. Money and assets of a non-real estate closed-ended investment traded fund may not be invested in real estates.