Real Estate Contributions Regulation
The adoption of these instructions came based on the roles of the Capital Market Authority (CMA) defined by the Real Estate Contributions Law, specifically in organizing the real estate contribution shareholder register, organizing the issuance of the real estate contribution certificate that proves the shareholder's ownership in the real estate contribution, in addition to the agreement with the General Authority for Real Estate regarding the organization of raising funds for the purpose of offering the real estate contribution, in order to keep pace with the great development in the real estate sector and open new financing and investment channels.These instructions are based on the CMA's roles defined by the Real Estate Contributions Law, specifically in organizing the shareholder's register for the real estate contribution. These instructions aim to regulate the registration and offering of real estate contribution certificates, including determining the requirements to be fulfilled before offering, marketing, advertising or raising funds for these certificates, the requirements for private placement and public offering of these certificates, in addition to regulating the obligations of the capital market institution through which the offering will be made, the organization of the shareholders" register, and the requirements for maintaining books and records.
These instructions aim to regulate the registration and offering of real estate contribution certificates, including determining the requirements to be fulfilled before offering, marketing, advertising or raising funds for these certificates. According to the most important provisions of the approved instructions, the capital market institution through which the offering will be made must ensure that sufficient information is provided to investors in the real estate contribution to enable them to make an informed investment decision, and that this information is complete, clear, correct and not misleading. The instructions also included that if the offering is not completed, it is canceled and the subscribers" funds are returned without any deduction within a period not exceeding ten days from the end of the offering period, provided that the Authority is notified thereof.
The instructions included that if the offering is not completed, it shall be canceled and the subscribers“ funds shall be returned without any discount within a period not exceeding ten days from the end of the offering period.
Certificates of Real Estate Contributions
The instructions also stipulate that the capital market institution through which real estate contribution certificates will be offered must submit a written request to the CMA, including the required data and documents, at least ten days before the proposed date of the private offering of real estate contribution certificates, while it specified at least 30 days to review the public offering requests before issuing its decision to approve, according to the conditions and controls it deems appropriate, or reject the request.The approval of the instructions comes with the approval of the CMA.
The adoption of the instructions comes after the CMA published on November 6, 2023 the draft ”Instructions for Offering Real Estate Contribution Certificates" on the National Competitiveness Center's unified electronic platform for polling the public and government entities (Polling Platform) and the CMA's website to solicit public feedback on it, which was accompanied by the amendment of the rules of offering securities and continuing obligations and the list of terms used in the CMA's regulations and rules, after seeking public feedback on the amendments contained therein.
The CMA's regulations and rules are subject to public feedback on the amendments.
The instructions for offering Certificates of Real Estate Contributions , the amended rules for offering securities and continuing obligations and the list of terms used in the CMA's regulations and rules can be viewed through the following link: www.cma.org.sa .
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