The Board of Directors of the Financial Regulatory Authority (FRA), chaired by Mohamed Farid, has issued Decision No. 125 of 2025, introducing—for the first time—comprehensive rules for establishing digital platforms dedicated to investing in real estate investment fund (REIF) certificates. The regulation sets out a framework allowing individuals to invest in fractional ownership shares of real estate units through investment certificates issued by REIFs and offered via licensed digital platforms authorised for promotion, underwriting, and receiving subscriptions. The move aligns with the FRA's strategy to expand access to innovative, low-cost investment products that cater to diverse market participants, thereby advancing financial, investment, and insurance inclusion. In a statement on Wednesday, the FRA said the decision aims to establish a unified legal framework to govern all digital platforms offering REIF certificates, ensuring a secure, transparent, and efficient investment environment. It also facilitates the regularisation of existing platforms and helps real estate developers understand the requirements for presenting their projects to investors through licensed digital platforms linked to REIFs. The decision follows extensive consultations between the FRA, leaders of the real estate development sector, and operators of electronic platforms that sell real estate shares to the public. These discussions reflect the FRA's policy of engaging stakeholders to produce regulations with tangible impact. As a result, three companies currently operating real estate investment platforms have applied to regularise their status. Under the decision, a digital platform for REIF certificates is defined as a technology-driven business model licensed by the FRA to conduct non-banking financial activities, allowing the subscription to and redemption of REIF certificates. Such platforms must display all relevant data for transactions, provide full disclosures for investor monitoring, and publish periodic pricing based on FRA-licensed valuations conducted in line with approved standards. All contracts and certificates must be stored electronically with FRA-licensed entities. Investor Registration and Safeguards Platforms may register investors only after verifying they meet the criteria—most notably, passing a knowledge test prepared by the platform and approved by the FRA after reviewing educational materials on the investment instrument and associated risks. Platforms must use FRA-approved secure payment channels, open the necessary accounts under Central Depository and Registry Company procedures, and list licensed REIFs only after obtaining FRA approval. Subscriptions and redemptions must follow the FRA-approved summary prospectus, which must be published on the platform and include the minimum subscription level for a successful issue and a summary feasibility study. Communication, Transparency, and Compliance To maintain investor trust, platforms must establish direct communication channels between the REIF and investors, promptly answer queries, log complaints with outcomes, and submit quarterly complaint reports to the FRA. All software, IT infrastructure, and databases must be FRA-approved. Before registration and investment, platforms must disclose conditions for registration, the platform manager's details, complaint and dispute resolution procedures, operational risks, and refund processes if an issue is cancelled or under-subscribed. Investors must have access to full disclosures for each issue, including the approved summary prospectus, audited financial statements, payment schedules, minutes of certificate holders' meetings, capital increase details, current issue size, outstanding certificates, default execution terms, and semi-annual net asset value reports. Additional mandatory disclosures include the feasibility study for each project, asset fair value (as assessed by an FRA-registered valuer), purchase prices and justifications, details of asset sales compared with market values, dividend distribution dates and values, property insurance documents, and any legal rulings or measures affecting property status or investor decisions. Any unresolved breach of the investment policy must be disclosed within a week and updated weekly thereafter. Material Events and Subscription Procedures Platforms must promptly disclose all material events affecting fund investments, including new obligations, borrowing by the fund, and significant property-related information. The subscription process must include a digital form with an explicit investor acknowledgment of associated risks, a dedicated bank account for each issue, and electronic confirmation of payment. Funds must be returned immediately if an investor withdraws within the permitted period or if the minimum subscription level is not reached. Platforms must provide a real-time coverage indicator and notify investors upon successful subscription, while also informing the Central Depository and Registry Company to register ownership and issue digital investment certificates. Redemption Rules Redemptions must follow the approved prospectus and may be funded from available liquidity, new subscriptions, or loans. Redemption requests can only be met up to the legal limit of 20% of total issued certificates. Any certificates reacquired through redemption must be sold within a year or cancelled to reduce fund size, and such certificates carry no voting or dividend rights. Platforms must use FRA-approved digital redemption forms detailing the certificate holder's information, quantity of certificates, payment schedules, and latest net asset value as calculated by the administration services company. Accountability and Liability All parties involved—the platform manager, REIF, investment manager, administration company, subscriber, redemption applicant, and the Central Depository and Registry Company—are prohibited from issuing false or misleading information and are liable for compensating affected parties for inaccurate disclosures.
