Saudi Arabia’s Capital Market Authority (CMA) opened a public consultation on draft amendments to enhance the governance of Special Purpose Entities (SPEs) and facilitate their procedures, with the aim of making SPEs more attractive vehicles for issuing debt instruments and investment units. The draft is intended to support further development of the sukuk and debt instruments market and enable growth in the asset management industry. Key proposals include expanding the range of eligible issuers, provided this does not conflict with regulations relevant to the entity’s activity, and allowing SPEs to offer debt instruments through exempt offerings in addition to existing public and private offerings. The draft would also enable SPEs to carry out securitization transactions, simplify procedures, and clarify the responsibilities of directors and, for funds structured as SPEs, the fund manager in the entity’s by-laws. Governance measures include requiring the trustee to be a legal entity, strengthening provisions on trustee removal, ensuring board members’ independence from the sponsor and originator, and refining dissolution procedures; the CMA also pointed to the growth in SPEs, from 464 established between 2018 and 2023 to 945 active entities by end-Q4 2024. Comments are requested over a 30-calendar-day period ending 29 April 2025, and the CMA indicated feedback will be taken into consideration ahead of approving the final amendments.

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