Discretionary Investment Advisory Agreement Template for Saudi Arabia

The Discretionary Investment Advisory Agreement is essential for investment management relationships in Saudi Arabia where professional advisors are granted authority to make investment decisions on behalf of clients. This document is required when establishing a regulated investment management relationship under Saudi Arabian law and Capital Market Authority (CMA) supervision. It is typically used when clients wish to delegate investment decision-making to a professional advisor while maintaining specific investment guidelines and restrictions. The agreement must comply with various CMA regulations including the Authorized Persons Regulations, Investment Funds Regulations, and Client Money Rules. It contains detailed provisions on investment strategy, risk management, client classification, reporting requirements, and fee structures, while ensuring compliance with both Saudi regulations and market practices.

1. Parties: Identification of the investment advisor and the client, including registration/license details of the advisor and legal status of both parties

2. Background: Recitals explaining the advisor's authority to provide services and the client's intention to appoint the advisor

3. Definitions and Interpretation: Key terms used throughout the agreement, including regulatory terminology and investment-related definitions

4. Appointment and Scope of Authority: Terms of the advisor's appointment and extent of discretionary authority

5. Investment Guidelines and Restrictions: Agreed investment parameters, restrictions, and investment strategy

6. Services and Obligations: Detailed description of services to be provided and the advisor's obligations

7. Client's Obligations: Client's responsibilities including information provision and compliance with regulations

8. Fees and Expenses: Fee structure, calculation method, payment terms, and other chargeable expenses

9. Representations and Warranties: Standard and regulatory-specific representations from both parties

10. Risk Disclosures: Mandatory risk warnings and disclosures as required by CMA regulations

11. Confidentiality: Confidentiality obligations and permitted disclosures

12. Conflicts of Interest: Disclosure and management of potential conflicts

13. Reporting and Valuations: Reporting obligations, frequency, and valuation methodologies

14. Term and Termination: Duration of agreement and termination provisions

15. Liability and Indemnification: Extent of advisor's liability and mutual indemnification provisions

16. General Provisions: Standard boilerplate clauses including notices, amendments, assignment, and governing law