Saudi Arabia is introducing new reforms to raise the competitiveness of the kingdom's asset management industry.

The Capital Market Authority (CMA) said it has approved a comprehensive package of enhancements which apply to investment funds and real estate investment funds regulations.

The reforms seek to streamline fund management, promote transparency and provide more investor protection. They're also designed to align with global best practices and support the growth of both traditional and real estate investment funds.

Among the improvements, the CMA is now allowing more digital channels to distribute the funds, such as investment fund distribution platforms and electronic money companies licensed by the central bank, making it easier and more flexible for people to invest.

Real estate investment funds traded on the parallel market (Nomu) can also invest in property projects with greater flexibility upon establishment, easing previous percentages and asset restrictions.

As for money market and capital protection funds, investments in a single debt instrument source will be capped at 10% and total exposure to one entity will be limited at 25% of the net value of the fund's assets, thereby lowering risks and boosting portfolio diversification.

The regulatory improvements are being introduced as Saudi Arabia's asset management sector has seen significant growth.

Last year, 44 investment funds received CMA approval. They include 15 equity funds, five money market funds, seven endowment funds and four exchange-traded funds (ETFs) among others.

(Writing by Cleofe Maceda; editing by Seban Scaria)

Seban.scaria@lseg.com