المادة 43: Investment Limitations

Article 43: Investment Limitations

a. Unless a public fund is established and approved by the Authority as a specialized public fund or a specific waiver has been obtained from the Authority, the following investment limitations shall apply.

b. Investments of the public fund’s money and assets must be in another investment fund in accordance with the following conditions:

1. The investment of the public fund’s money and assets shall be limited to investment in the funds registered with the Authority or investment funds outside the Kingdom subject to an equivalent regulatory oversight in a jurisdiction recognised by the Authority as having equivalent regulation. The Authority shall have the discretion to assess whether the jurisdiction has regulatory standards and requirements at least equivalent to those of the Authority.

2. The investment of the public fund’s money and assets in private funds or illiquid assets, in accordance with Paragraph (j) of this Article, shall not exceed (10%) of the public fund’s net assets value.

3. The investment of the money and assets of the public fund shall not exceed (25%) of its net asset value in the units of another investment fund, or in the units of different investment funds issued by the same capital market institution.

c. Not more than )10%( of the issued securities of any single issuer may be held for the benefit of the public fund.

d. With regards to the provisions of Subparagraph (3) of Paragraph (b) of this Article, not more than )10%( of the public fund’s net asset value may be invested in a class of securities issued by any single issuer, and in all cases not more than (20%) of fund’s net assets value may be invested in all classes of securities issued by any single issuer.

e. The following investment shall be exempted from the provisions of Paragraph (d) of this Article:

1) Investment in debt instruments issued by the Government of the Kingdom in the currency of the fund, and if its currency is other than the currency of the fund, investment in such may not comprise more than (35%) of the net asset value of the public fund.

2) Investment in debt instruments issued by sovereign issuer other the government of the Kingdom, which may comprise not more than ) 35%( of the net asset value of the public fund;

3) Investment of more than )10%( of the public fund net asset value in one class of listed debt instruments issued by a single issuer, which may comprise not more than )20%( of the net asset value of the fund

4) Investment of more than (10%) of the public fund’s net asset value in shares issued by any single issuer listed on the Exchange or any other regulated exchange. Provided that the issue’s percentage of market value does not exceed the total market value of all listed shares on the relevant exchange. This is for a public fund that aims to invest in shares listed on the Exchange or any other regulated exchange, provided that investment in such does not exceed (20%) of the fund’s net assets value.

5) Investment of more than )10%( of the public fund’s net asset value in shares listed in the Exchange or any other regulated exchange by any single issuer affiliated with a field or sector in which the fund’s general objective is to invest in it. Provided that the market value of the issue percentage shall not exceed the total market value of that particular field or sector, for the public fund whose Terms and Conditions state that its investment objective is specified in a field or sector of listed shares, provided that the investment in it shall not exceed (20%) of the fund's net asset value.

f. With regards to the provisions of Paragraph (c) of Article (41) of these Regulations, and except for the investment in investment funds, not more than (25%) of the public fund’s net asset value may be invested in deferent parties belonging to the same group, including all investments in securities issued by them, money market transactions with them and bank deposits to them.

g. Not more than (20%) of the net asset value of the units of another investment fund may be held for the benefit of a public fund.

h. The borrowing of the public fund may not exceed (15%) of its net asset value.

i. Not more than (15%) of the public fund’s net asset value may be invested in derivatives.

j. Not more than (10%) of the public fund’s net asset value may be invested in illiquid assets.

k. The portfolio of a public fund may not include any security where a call is to be made for any sum unpaid on that security unless it is feasible to pay the entire amount of cash or securities that can be converted into cash from the portfolio of the fund within (5) days.