What a Simplified Investment Fund is
A Simplified Investment Fund ("SIF") is a fund established under the CMA's Instructions of Simplified Investment Funds, effective 2 March 2026. The regime recognises a straightforward principle: where a fund raises capital exclusively from institutional investors, it does not require the same prescriptive supervision that applies when retail participation is possible.
Historically, private funds in the Kingdom could be offered to institutional clients, qualified clients, and — subject to safeguards — retail investors. Because retail participation was possible, the CMA applied a relatively strict template to fund documentation. Governance mechanics, removal rights, termination provisions, reporting standards and economics were heavily standardised, leaving managers limited room to design bespoke terms. The SIF regime is a deliberate recalibration of that approach for institutional-only vehicles.
Who is allowed to invest
This is the most consequential and most frequently misunderstood point. SIF units may be offered by way of private placement to Institutional Clients only. In practice that means:
- Saudi government and sovereign entities
- Companies with a net worth of at least SAR 50 million
High-net-worth individuals and companies with net worth between SAR 10 million and SAR 50 million fall into the separate Qualified Client category and are not automatically eligible. Offering to other investor categories requires CMA approval on request.
Operational consequence. An angel syndicate whose members invest personally cannot simply subscribe to a SIF. Participation typically requires a qualifying corporate vehicle, or the approval route. Any manager building an investor pipeline should classify eligibility before extending an invitation — because an invitation is an offer.
Fund terms: freedom, with a minimum
Managers are no longer required to follow the prescribed Terms and Conditions template under the Investment Funds Regulations. Instead, the Instructions require that certain minimum disclosures be present, including:
- Key subscription terms, capital information and unit value
- Establishment and issuance requirements
- Fund manager information and fund classification
- Investment strategy and objectives
- Roles and responsibilities of all parties
- Fee arrangements and risk factors
Everything else — manager removal mechanics, voting thresholds, termination, reporting cadence, waterfall design, clawback and giveback, multiple unit classes — becomes a matter of negotiation. For institutional investors accustomed to international private fund documentation, this is a significant improvement. For managers, it means the drafting burden shifts from filling in a template to designing terms and evidencing that nothing mandatory was omitted.
Custody: two meaningful exemptions
Funds under the CMA framework generally must appoint an independent, CMA-licensed custodian. The Instructions introduce two exemptions:
| Structure | Custody position |
|---|---|
| Special Purpose Entity (SPE) | Exempt from appointing a custodian |
| Feeder fund | Custodian required, but need not be independent |
| Other forms | CMA-licensed custodian required; may not be the fund manager, sub-manager, or an affiliate of either |
For single-deal vehicles and co-investment SPVs, the SPE exemption removes a cost line and a coordination dependency — one of the clearest practical wins in the regime.
The offering process — and a caution
The mandatory minimum review period of 15 business days has been eliminated. A fund manager notifies the Authority prior to the proposed offering date, submitting the prescribed declaration, the fund terms and offering documents, and the registration fee. In practice, a fund can launch in fewer than 15 business days where the submission is in order.
Read this carefully. "No prescribed minimum notice period" is not the same as "automatic clearance." The CMA retains its powers to investigate, request information, suspend, or prohibit an offering — and it may consider whether a proposed offering is commensurate with the manager's capabilities. Emerging managers and novel strategies should plan for interaction, not assume silence.
What has not changed
Contractual freedom does not displace the regulatory floor. Regardless of how bespoke the fund terms become:
- The fund must be managed by a CMA-licensed capital market institution
- Conflicts of interest must be identified and managed
- Fund assets must be segregated from the manager's own assets
- Annual financial statements must be prepared to SOCPA standards and audited by a CMA-registered auditor
- The manager remains liable for losses arising from negligence or misconduct
- Secondary transfers of units are restricted to Institutional Clients
- A manager licensed only for managing investments may not invest fund assets in real estate
A practical launch sequence
- Confirm the licensing position. Identify the CMA-licensed fund manager and confirm the permission scope covers the intended asset class.
- Choose the structure. SPE, feeder, or other — this determines the custody obligation before anything else is drafted.
- Draft terms against the minimum-disclosure list. Design freely, then verify every mandatory element is addressed.
- Prepare the notification pack. Declaration, fund terms, offering documents, registration fee.
- Notify, then track. Do not extend offers before notification; keep a record of any CMA information requests and responses.
- Classify investors before inviting them. Evidence Institutional Client status, complete KYC and AML screening, and retain the evidence.
- Operate the vehicle. Subscriptions, capital calls, distributions, reporting — and the standing compliance calendar (audit, conflicts register, segregation confirmations).
Why this matters now
Saudi Arabia is the region's most active venture market, with over USD 1.5 billion deployed annually, and assets under management in Saudi-domiciled funds exceeding SAR 350 billion and compounding. For a decade, syndicates and co-investment vehicles serving Saudi deals were routinely formed offshore — in ADGM, DIFC or Cayman — largely because the Kingdom offered no comparably fast vehicle. The SIF regime narrows that gap materially. The question facing managers is no longer whether an onshore vehicle is possible, but whether their operations can execute one repeatably.
Building a SIF and want the operational rails?
Sundooq is onboarding a small group of pilot partners — fund managers, syndicate leads, family offices, and their investors.
Email [email protected]