Saudi Arabia's Capital Markets Authority has launched a public consultation on a draft regulatory framework that would permit licensed capital market institutions conducting Managing Investments or Managing Investments and Operating Funds to provide robo-advisory services, defined as algorithm-based management of client investments using pre-determined strategies with no or limited human intervention. The draft sets operational, disclosure and governance conditions, including advance notification to the CMA of portfolio construction and management strategies and any updates before they are made available to clients, and the establishment of systems and controls to ensure the soundness and efficiency of the algorithms and technologies used, supported by periodic testing. It also limits portfolio concentration in a single asset or securities from a single issuer, requires foreign securities to be supervised by a regulator with standards at least equivalent to those applied by the CMA, mandates client-facing disclosures on strategy, asset selection, allocation and rebalancing, and introduces functional registration requirements including an Information Technology Officer responsible for the relevant technological systems. Further requirements cover publishing since-inception performance track records on firms’ websites, including performance measurement methodologies and net total returns after actual expenses, alongside ongoing prudential requirements aimed at service continuity and investor protection. The CMA cited robo-advisory assets under management of about SAR 3.4 billion by end-2024 and around 382,616 portfolios by end-Q4 2024, with retail portfolios representing 99.76%. Comments are open for 30 calendar days, ending on 24 September 2025 (02/04/1447H), and will be considered ahead of finalising the proposed amendments.

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