CMA wants private funds to disclose what they hold and what they made on the way out

The Capital Market Authority wants private funds to show what’s under the hood. The CMA has put a package of draft amendments (pdf) to its investment funds rules out for a 30-day public consultation on Istitlaa, and under the renumbering sits new asset-level reporting demands on real estate, private equity, and venture funds.

What they own, what it’s worth, what they made: Real estate funds would report holding by holding, disclosing the type of asset, its city or neighborhood, its latest valuation, how far development has progressed, and occupancy rates, where applicable, according to the draft. Private equity and venture capital funds would disclose each investee company, the fund’s stake in it, and the latest valuation — and, on any exit, the value realized, the share divested, and the return the fund made.

Closed-ended traded funds would flag agreements sooner. The threshold at which they must disclose a material transaction falls to 5% of net assets, from 10%.

Conflicts of interest get a dedicated disclosure regime. Managers would publish a summary of each conflict, naming the parties, the impact, and the action taken, then sign an acknowledgement that they have disclosed all of them.

The bigger picture: This draft is the latest in a run of CMA moves since Mazen Al Sudairi took over as chairman, all pulling toward a market whose numbers investors can rely on and whose capital pools run deeper. Last month the regulator moved to rewire the IPO process, requiring banks to firmly underwrite offerings and large book-building bids to be backed by verified cash, after a year in which heavy oversubscription kept failing to carry through to aftermarket performance. Weeks earlier it capped public money market funds’ offshore holdings at 5% of net assets, steering liquidity into local deposits, murabaha, sukuk, and short-term paper.

Read together, the three target the two things Saudi needs to draw bigger flows: credibility and depth. The disclosure and underwriting rules make prices and valuations mean more; the offshore cap builds the domestic capital that buys them.