Saudi Arabia's Capital Market Authority (CMA) Board has approved amendments to the Capital Market Institutions Regulations to regulate robo-advisory services, defined as the use of algorithms and modern technological tools to manage clients’ investments according to predetermined investment strategies. The framework allows robo-advisory to be provided by Capital Market Institutions licensed to conduct Managing Investments activities, or Managing Investments and Operating Funds activities, following pilot implementation by authorized fintech companies in the FinTech Lab. The amendments impose controls on strategy governance and technology oversight, including an obligation to notify the CMA in advance of portfolio construction and management strategies and any material updates before making them available to clients. Firms must establish supervisory systems and procedures to ensure the integrity and efficiency of the algorithms and technologies used, and conduct periodic testing to verify reliability and effectiveness at least ten days before offering the service on the platform. Provision is permitted only where portfolios are not concentrated in a single asset or in securities issued by a single issuer, and where any securities issued or listed outside the Kingdom are subject to supervision by a regulator with standards and requirements at least equivalent to those applied by the CMA. Disclosure requirements cover the service’s operational mechanism, including strategies, asset selection criteria, allocation rules and rebalancing, as well as clear and non-misleading disclosure of the role of algorithms and associated risks tailored to the targeted client segments; firms must also disclose and publish on their websites performance track records since inception, including measurement bases and total returns after deducting actual expenses, and register the Information Technology Officer responsible for overseeing the technological systems supporting the service. The CMA also referenced growth in fintech investment management activity, with assets under management through fintech platforms rising 87% to SAR 6.41 billion by end-fourth quarter 2025 and the number of investment portfolios increasing 40% to 534,571 over the same period. The amendments follow a public consultation launched in late August 2025 on a draft regulatory framework for robo-advisory.
Saudi Arabia Capital Markets Authority 2026-03-05
Saudi Arabia's Capital Market Authority approves amendments regulating robo-advisory services by licensed capital market institutions
Saudi Arabia's Capital Market Authority (CMA) approved amendments to regulate robo-advisory services, allowing licensed Capital Market Institutions to offer these services after fintech pilot implementation. The framework mandates strategy governance, technology oversight, and comprehensive disclosure requirements, including performance track records and algorithmic risks. Fintech investment management activity has grown significantly, with assets under management rising 87% to SAR 6.41 billion by the end of Q4 2025.