Article 15: Delegation by the Fund Manager

Article 15: Delegation by the Fund Manager

a) A fund manager may, in respect to any investment fund which the Fund Manager manages, delegates one or more third parties or affiliates as a fund sub-manager. The remuneration of any fund sub-manager must be paid by the Fund Manager out of its own resources.

b) With the exception of the cases mentioned in paragraph (c) of this Article, the Fund Sub-Manager must be delegated in accordance with paragraph (a) of this Article as capital market institution authorised to conduct investments management and funds operation activity, and it must be delegated under a written contract.

c) A fund manager may appoint fund sub-manager operating in a jurisdiction outside the Kingdom to manage foreign investments of the investment fund, however the sub-manager shall be established, authorised and supervised in a jurisdiction that employs regulatory standards and requirements at least equivalent to those of the Authority, and must be appointed pursuant to a contract in writing.

d) The Authority shall have the discretion to assess whether the jurisdiction in which any fund sub-manager operates has regulatory standards and requirements at least equivalent to those of the Authority.

e) The fund manager may assign a third party or more, or any of his affiliate to work as a distributor to units of any real estate investment fund managed by the fund manager. The distributor's remuneration must be paid from the fund manager's own resources.

f) The distributor that has been assigned in the Kingdom pursuant to paragraph (e) of this Article, must be one of the following:

1. A capital market institution licensed to carry out dealing activity.

2. A capital market institution licensed to carry out advising activity.

3. A local bank.

4. Investment Fund Distribution Platform.

5. Electronic Money Institution licensed by the Saudi Central Bank. g ) The assignment referenced in paragraph (e) of this Article must be made pursuant to a contract in writing, and where the distributor is a local bank or an Electronic Money Institution licensed by the Saudi Central Bank, it must include the following controls at minimum:

1. The units of the publicly offered real estate investment funds shall be distributed through the distributor’s websites or application only.

2. The website or application of the assigned distributor shall provide the ability to fill and sign the following documents including:

a) The fund manager's investment account opening agreement.

b) The “Know Your Customer” form provided in the Capital Market Institution Regulations.

c) The Fund’s subscription form, and the terms and conditions or the fund to be subscribed in.

h) Where the fund manager has assigned the distributor under paragraph (e) of this Article, the fund manager is responsible for complying with the Capital Market Law and its implementing regulations, and the Anti-Money Laundering Law, and its implementing regulations. The fund manager may rely on the assigned distributor to take due diligence measures towards the customer according to the relevant provisions contained in the Anti-Money Laundering Law and its implementing regulations.

i) The fund manager may assign a third party or more, to carry out the fund operations, including administrative services for the fund.

j) With exception for cases described in paragraph (k) of this Article, any third party assigned pursuant to paragraph (i) of this Article must be a capital market institution authorised to carry out managing investments and operating funds activity, and must be assigned pursuant to a written contract.

k) A fund manager may assign a third party operating in a jurisdiction outside the Kingdom to carry out the fund operations in relation to investment fund's foreign investments. The third party must be established, authorised and supervised in a jurisdiction that employs regulatory standards and requirements at least equivalent to those of the Authority, and must be assigned pursuant to a contract in writing.

l) The Authority shall have the discretion to assess whether the jurisdiction in which any third party operating has regulatory standards and requirements at least equivalent to those of the Authority.