The offering of private real estate investment fund's units is deemed private if offered as per the provisions set forth in part 4 of the Investment Fund Regulations.

These Regulations aim at regulating the establishment, offering, and management of Real Estate investment Funds, protection of Unitholders rights and the application of disclosure and transparency rules. These Regulations should be read in conjunction with and in addition to the Authorised Persons Regulations and the Securities Business Regulations

A Real Estate Investment Fund means a collective real estate investment scheme which aims to provide the chance for investors to participate together in the scheme’s profits, managed by the Fund Manager for a specified fee.

(a) The applicant, seeking the Authority approval to offer units for a Real Estate Investment Fund should be authorised by the Authority to conduct managing business. (b) Units of Real Estate Investment Fund shall not be offered by way of a public offer unless the Authority has first received and approved the information referred to in Article (3). (c) The application for offering units of Real Estate Investment Fund shall include the information set forth in Article (3) of Real Estate Investment Fund Regulations. (d) To provide any other requirement the Authority requests with accordance to the Capital Market Law and its Implementing Regulations.

A contractual relationship is developed between the Fund Manager and Unitholders as soon as the authorised Fund’s Terms and Conditions are signed according to Real Estate Investment Fund Regulations.

They are closed-ended Real Estate Investment Funds., which operate according to the objectives set forth in Article (6) of the Real Estate Investment Funds Regulations. Funds may be established for other purposes as per terms and conditions set by the Authority.

Real estate investment funds operate according to the following objectives: a) Initial Development then Selling: This is in the form of owning a piece of raw land, developing it, dividing it into residential or commercial plots, then selling it and terminating the Fund. b) Constructional Development then Selling: This is in the form of owning a piece of raw or developed land with the purpose of constructing residential or commercial units, then selling it and terminating the Fund. c) Initial or Constructional Development with the intention of leasing it for a certain period of time then selling it and terminating the Fund. Funds may be established for other purposes as per terms and conditions set by the Authority.

A person authorised to perform management business according to the Authorized Persons Regulations, who is responsible for the management of the Fund’s assets.

A person nominated by the Fund Manager and responsible for the execution of the technical aspects to attain the Fund’s purposes.

Without prejudice to the rule of Real Estate Ownership for Non-Saudis in the Kingdom, subscription in the Fund is open to any Saudi, GCC citizens or non- Saudi residents in the Kingdom.

A potential investor can subscribe to the fund by visiting a fund manager's branch and pay the full unit value during the subscription period as per the fund's terms and conditions.

A fund manager shall provide the unitholder with a signed copy of the fund's terms and conditions, and send a subscription confirmations notice to the unitholder.

A person chosen by the Fund Manager, to evaluate the Fund’s assets, who should have the required knowledge and experience to provide Real Estate evaluation services. Evaluators and vlauers shall be active members of the Saudi Authority for Accreditied valuers (taqeem).

The purpose of these Rules is to regulate the public offering, registration and admission to listing of securities in the Kingdom.

These Rules shall not apply to the offering of units in investment funds.