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The Discretionary Management Agreement is a crucial document used when establishing a professional investment management relationship in Saudi Arabia. It is specifically designed for situations where clients wish to delegate investment decision-making authority to a qualified investment manager authorized by the Capital Market Authority (CMA). The agreement covers essential aspects such as investment mandate, risk parameters, fee structures, and reporting requirements, while ensuring compliance with both CMA regulations and Shariah principles where applicable. This document is particularly important in the Saudi Arabian context as it must balance international investment management practices with local regulatory requirements and Islamic finance principles. It includes specific provisions for asset segregation, investment restrictions, and client protection measures as required by Saudi Arabian law.

1. Parties: Identification of the investment manager and the client, including full legal names and addresses

2. Background: Context of the agreement and brief description of the services to be provided

3. Definitions: Key terms used throughout the agreement, including regulatory and technical terms

4. Appointment and Authority: Formal appointment of the manager and scope of discretionary authority

5. Investment Objectives and Strategy: Agreed investment objectives, strategy, and any specific client requirements

6. Investment Restrictions: Limitations on investments, including Shariah compliance requirements and prohibited investments

7. Services and Obligations: Detailed description of services provided and manager's obligations

8. Client's Representations and Warranties: Client's confirmations regarding their status, authority, and understanding

9. Manager's Representations and Warranties: Manager's confirmations regarding licensing, capabilities, and compliance

10. Fees and Expenses: Management fees, performance fees, and other charges

11. Reports and Valuations: Reporting obligations, frequency, and valuation methodologies

12. Risk Disclosures: Mandatory risk warnings and acknowledgments

13. Confidentiality: Confidentiality obligations and permitted disclosures

14. Conflicts of Interest: Management of potential conflicts and disclosure requirements

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

16. Liability and Indemnification: Scope of liability and indemnification provisions

17. Anti-Money Laundering: AML compliance requirements and obligations

18. Governing Law and Jurisdiction: Saudi Arabian law as governing law and jurisdiction provisions

19. Notices: Communication methods and contact details

20. General Provisions: Standard boilerplate clauses including amendments, assignment, and severability