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The Sub Advisor Agreement is utilized when a primary investment advisor licensed by the Saudi Arabian Capital Market Authority (CMA) seeks to delegate specific investment management or advisory responsibilities to another specialized firm (sub-advisor). This arrangement is common in complex investment strategies, specialized market segments, or when accessing international expertise. The agreement must carefully balance regulatory requirements, including CMA regulations and Shariah compliance, with practical business needs. It typically includes detailed provisions for service scope, compliance obligations, performance metrics, risk management, and fee structures. The document is particularly important in Saudi Arabia's evolving financial markets, where international best practices must be adapted to local regulatory requirements and Islamic financial principles.

1. Parties: Identification of the primary advisor and sub-advisor, including their regulatory status and licensing details

2. Background: Context of the agreement, including the primary advisor's relationship with its clients and the need for sub-advisory services

3. Definitions: Detailed definitions of terms used throughout the agreement, including regulatory and technical terms

4. Appointment and Scope: Formal appointment of sub-advisor and detailed scope of sub-advisory services

5. Regulatory Compliance: Obligations to comply with Saudi CMA regulations, Shariah principles, and other applicable laws

6. Services and Obligations: Detailed description of services to be provided and specific obligations of the sub-advisor

7. Fees and Payment Terms: Fee structure, calculation methodology, payment terms, and expenses

8. Performance Standards: Required service levels, performance metrics, and quality standards

9. Representations and Warranties: Standard and specific warranties from both parties

10. Confidentiality: Confidentiality obligations and data protection requirements

11. Conflict of Interest: Provisions for identifying, preventing, and managing conflicts of interest

12. Risk Management: Risk management procedures and requirements

13. Reporting Requirements: Regular reporting obligations and documentation requirements

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

15. Liability and Indemnification: Limitation of liability and mutual indemnification provisions

16. Force Majeure: Provisions for unforeseen circumstances and force majeure events

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

18. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment