The Capital Market Authority (CMA) has approved amendments to the Capital Market Institutions Regulations, formally establishing the regulatory framework for robo‑advisory services in Saudi Arabia. This follows the successful pilot conducted within the CMA’s FinTech Lab and represents a shift from limited sandbox experimentation to full regulatory integration.

Robo‑advisory services may now be offered by Capital Market Institutions licensed to conduct Managing Investments or Managing Investments and Operating Funds activities.

Key Compliance Obligations

  1. Advance CMA Notification: Portfolio construction strategies and any material updates must be notified to the CMA before being made available to clients.
  2. Algorithmic Oversight: Institutions must maintain supervisory systems that ensure the integrity of algorithms, with mandatory periodic testing at least ten days prior to launching the service.
  3. Portfolio Diversification: Portfolios must not be concentrated in a single asset or issuer. Foreign securities included in portfolios must be supervised by an equivalent regulatory authority.
  4. Disclosure Requirements: Firms must provide fair, clear, and accurate disclosures covering investment strategies, asset selection criteria, allocation rules, rebalancing mechanisms, the role of algorithms, and associated risks.
  5. IT Officer Registration: Introduction of a new registrable function within the CMA’s functions framework.

By the end of Q4 2025, assets under management (AUM) through FinTech platforms had increased by 87% to SAR 6.41 billion, with portfolios rising 40% to 534,571. This underscores the rapid growth and increasing acceptance of algorithm‑driven wealth management solutions in the Kingdom.

Broader Context

These amendments form part of the CMA’s wider regulatory modernization agenda, which has recently included:

  • Foreign Investor Access (February 2026): Removal of the Qualified Foreign Investor framework, allowing all foreign investors to invest directly in the Main Market.
  • Simplified Investment Funds: Introduction of a more flexible and cost‑effective framework for institutional funds, representing a fundamental shift for private equity and venture capital structures.
  • Saudi Depositary Receipts and Omnibus Accounts (July 2025): Expanding product offerings and facilitating cross‑border capital flows.

The regulatory direction is clear: expanding the investment product universe, eliminating unnecessary barriers, and embedding technology within a robust regulatory perimeter.

Takeaway

While the compliance requirements are substantial, the opportunity is equally significant. With FinTech AUM increasing nearly 90% year‑on‑year, institutions that invest early in strong governance and compliance infrastructure will be better positioned to capture the fast‑growing robo‑advisory market.