Saudi caps public money-market funds’ foreign assets at 5%

Saudi Arabia’s Capital Market Authority has told managers of public money-market funds that assets invested outside the kingdom may not exceed 5% of a fund’s net asset value. In practical terms, for every 100 riyals in a fund, no more than five can be allocated abroad. Money-market funds are designed to park investors’ cash in relatively short-term instruments rather than take the bigger swings associated with stocks, so the rule affects a core cash-management product used by retail and institutional investors. It does not apply to every type of investment fund, but it sharply shifts these public funds’ default allocation toward Saudi-based assets, potentially reducing overseas diversification and making local short-term markets more important to fund managers.