Saudi CMA Caps Money Market Funds' Overseas Investments at 5% of NAV
Managers above the new ceiling get up to two years to comply, while funds with more than a fifth of net asset value abroad must cut that exposure within six months.
Tariq Benali Tariq Benali covers business and corporate news across the UAE and MENA for Anecdoted, tracking the deals, leadership moves and regulatory shifts behind the region's companies. tariq@anecdoted.com
Saudi Arabia's Capital Market Authority has capped overseas investments by public money market funds at 5% of net asset value.
The regulator sent a circular to capital market institutions on Tuesday, as reported by media outlets. Funds sitting above that share of NAV will be given time to work their way down.
Two clocks for compliance
Managers holding more than 5% of NAV abroad get a runway of up to two years, counted from the day the circular was issued, to reach the ceiling. During the adjustment period they are barred from putting on investments or transactions that would leave a fund above the limit.
A second deadline is shorter. Any fund with overseas exposure above 20% of NAV must bring it below that level within six months. Once there, the reduction carries on until the fund is inside the 5% cap.
Existing holdings that do not meet the new requirements also fall inside the two-year window.
Foreign counterparties face a condition of their own. They must hold a rating at investment grade, assigned by an agency that carries a licence.
A fast-growing corner of the industry
The cap lands on a segment that has been expanding quickly. Public money market fund assets stood at SAR 77 billion, or $20.5 billion, when 2025 closed, a rise of 57% year on year, according to the CMA's 2025 annual report. Total assets under management in the kingdom passed $320 billion, or SAR 1.2 trillion, over the same stretch.
Rules on how far those funds can reach offshore now touch a larger slice of the industry than they would have a few years ago. The staged deadlines give managers room to rebalance rather than sell in a hurry, which matters for funds whose overseas positions are hard to unwind quickly.
Leadership at the regulator changed in August, when Mazen Al-Sudairi was appointed chairman in place of Mohammed bin Abdullah Elkuwaiz. Al-Sudairi had served as an advisor at the Secretariat General of the Council of Ministers at the Excellent Grade since May 15, 2024, and before that led Sell-Side Research at Al Rajhi Capital from March 2017 to May 2024.
The CMA writes the regulations, rules and instructions needed to give the Capital Market Law effect, and it describes part of its remit as building an investment environment that attracts capital and keeps market confidence.
Institutions were told to follow the circular, the Capital Market Law and the rules that implement it. For managers with more than a fifth of NAV sitting abroad, the nearer of the two deadlines is the six-month one.
