Amendments to the list of financial market institutions requires the diversity of investments and enhancing transparency

The Capital Market Authority presented, through the “Plastic” platform, a draft amendment of the list of financial market institutions, focusing on setting an organizational framework for the services of the automated advisor." target ="_Blank"> The Capital Market Authority To enhance the efficiency of the market, and provide innovative and effective consulting solutions to investors, in line with the accelerated developments in the financial technology sector «Fintech) at the local and global levels." target ="_Blank"> The amendments The proposed financial market institutions licensed in the field of investment management or investment management and fund operation are allowed to provide the automated advisor service, provided that a set of controls are composed. Limited." target ="_Blank"> The financial market. The amendments to these institutions do some accompanying actions, provided that they do not conflict with regular requirements or affect their ability to adhere to the basic principles. Basic requirements before providing the service, most notably the diversification of investments so that the portfolio does not focus on one origin or securities for one source, and when dealing with securities outside Saudi Arabia, it must be subject to the supervision of a supervisory body with similar standards for the authority, and the institution’s commitment to a clear disclosure of the customer on portfolio management strategies, the standards of asset selection, the mechanism of re -balance, how to make algorithms and the risks associated with it. />
The amendments obligated financial market institutions to include service contracts with customers detailed provisions related to the mechanisms of the governor, starting with the initial value and their components, through the accounting periods of the statements, leading to the determination of the institution’s estimated authority in asset management. In addition to disclosing the details of the algorithms and technologies used, in order to enhance the investor’s awareness of the potential risks. It affects the safety of the market or the rights of investors. The function of the information technology official added as a prerequisite for the institutions that provide the service of the automated advisor, in addition to other administrative and executive positions such as the CEO, the financial manager, and the conformity and commitment official. To ensure the reliability of algorithms and the accuracy of their results, an independent annual evaluation of the safety of technical means, policies to address and reduce operational and technical risks, and keep the relevant documents and data for a period of ten years after their amendment or stop use. Disturbing, and to include sufficient information to take deliberate investment decisions. For the securities sector in Saudi Arabia, which opens the way for a broader use of modern financial technologies, and keeps pace with Saudi Vision 2030 targets in building an advanced financial sector that contributes to advancing economic growth.

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