Article 92: valuation

Article 92: valuation

a. The fund operator shall be responsible for valuing the fund’s assets, as well as pricing and dealing in the units of the private fund in accordance with a clear policy.

b. The fund manager must disclose the policy referred to in Paragraph (a) of this Article in the Fund’s Terms and Conditions and annual reports of the fund, and must establish a similar method for pricing the units for the purpose of issuing, transferring and redeeming .

c. The fund manager must notify the unitholders of any amendments to the valuation, pricing and dealing policy in the private fund units within a period not exceeding (5) days.

d. A fund manager of a private real estate fund must, before purchasing or selling any real estate assets, obtain valuation from at least two accredited valuers.

e. The real estate fund manager must ensure that any accredited valuer appointed pursuant to Paragraph (d) of this Article meets the following conditions:

1) the accredited valuer must be independent from all related parties

2) the accredited valuer must obtain the Saudi Authority for Accredited Valuers fellowship.

f. At the time of the purchasing or selling of the real estate asset, the accredited valuers’ valuation report issued pursuant to Paragraph (d) of this Article must not be more than three (3) months old.

g. In the case of a one investment goals of the fund includes Initial development or structural development, the fund manager of a private real estate fund must appoint one or more developers -provided that the duties and responsibilities of each developer are clearly specified in the fund's terms and conditions-, and an engineering office that is independent of any of the relevant parties, after ensuring that they have obtained the necessary approvals and licenses to carry out their business and activities from the relevant governmental bodies, and the engineering office shall – at least- oversee the implementation of the Fund's business plan, and the approval of disbursements to the developer and contractor.

h. For the purposes of this Article, the term related party shall mean any of the followings:

1) the fund manager.

2) the custodian.

3) the developer.

4) accredited valuer, where applicable.

5) the auditor.

6) board members, or any of the executives or employees of any of the parties above.

7) any unitholder whose ownership exceeds (5%) of the net assets of the private real estate investment fund.

8) any person under or in control of any of the previously mentioned persons.

i. For the purposes of this article, it is intended that meanings of the initial development and construction development set forth in the Real Estate Investment Funds Regulations.