FRA issues 1st rules for digital platforms investing in REIFs
Updated 8/7/2025 7:59:00 AM
Arab Finance: The Financial Regulatory Authority (FRA) has issued Decision No. 125 of 2025 to introduce rules, set for the first time, for establishing digital platforms planning to invest in real estate investment fund (REIF) certificates, according to a statement.
The new regulatory framework will enable individuals to invest in fractional ownership of real estate units through REIF certificates via digital platforms licensed to promote, underwrite, and receive subscriptions.
This mechanism aligns with FRA’s objectives to develop and provide innovative and affordable investment products that meet the aspirations of all stakeholders and boost financial inclusion.
Under the new regulation, the platform shall provide a digital subscription model that includes an explicit acknowledgement from the investor of their acceptance of the risks associated with investing in the REIF certificates.
A bank account is also needed to receive subscriptions for each issue, with the platform to send a detailed notification confirming the successful transfer. This aims to implement the subscription process remotely and in a secure manner.
As for redemption rules, the resolution regulates the fund company's ability to respond to redemption requests within the legally permitted maximum of 20% of the total issued certificates.
The fund company cannot to retain any certificates reacquired through redemption for more than one year, and they must be sold within a year or cancelled to reduce fund size. Such certificates have no voting or dividend rights.
The platform is also committed to providing the FRA-approved electronic forms for the redemption process.
These forms must include the details of the policyholder seeking redemption, the number of requested certificates, the dates and amounts of installments due, if any, and the net value of the certificates according to the latest value calculated by the management services company.
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