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The Discretionary Investment Management Agreement is essential for investment firms operating in Saudi Arabia who provide professional portfolio management services. It is used when clients wish to delegate investment decision-making authority to a qualified investment manager, allowing the manager to make investment decisions without seeking prior approval for each transaction. The agreement must comply with Saudi Arabia's Capital Market Authority regulations and Shariah principles, making it distinct from conventional investment management agreements in other jurisdictions. It typically includes comprehensive details about investment strategy, risk parameters, Shariah compliance requirements, reporting obligations, fee structures, and client communication protocols. This document is particularly important for establishing clear boundaries of authority and responsibilities while ensuring regulatory compliance in the Saudi Arabian market.

1. Parties: Identification of the investment manager and the client, including their legal status and contact details

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

3. Definitions: Definitions of key terms used throughout the agreement

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

5. Investment Objectives and Strategy: Client's investment objectives, risk profile, and agreed investment strategy

6. Shariah Compliance: Commitment to and requirements for maintaining Shariah compliance in investments

7. Services and Obligations: Detailed description of services provided and obligations of the investment manager

8. Client's Obligations: Client's responsibilities including providing information and maintaining minimum account balance

9. Fees and Expenses: Management fees, performance fees, and other charges applicable to the service

10. Reporting and Valuations: Frequency and content of reports, valuation methodology

11. Risk Disclosures: Disclosure of investment risks and market uncertainties

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

13. Representations and Warranties: Legal declarations by both parties

14. Confidentiality: Protection and handling of confidential information

15. Term and Termination: Duration of agreement and circumstances for termination

16. Governing Law and Jurisdiction: Application of Saudi law and jurisdiction for disputes