As part of its leading role in regulating and advancing the UAE’s capital markets—and in keeping with its established practice of seeking input from financial industry partners before finalizing new regulations—the Securities and Commodities Authority (SCA) has published a draft regulation for robo-advisor service on its website, www.sca.gov.ae. It invites stakeholders, experts, and relevant parties to provide their input and insights, which will be carefully considered when shaping the final version of the regulation. To access the draft regulation, please click here.
The draft regulation represents a transformative project aligned with the 2024-2025 performance agreements signed with federal government entities. These projects are seen as distinctive initiatives that propel the UAE forward and enhance its competitiveness while delivering a significant cross-sector impact within short periods of time. This project underpins the UAE’s efforts to advance the goal of becoming the new global economic hub over the next ten years, as part of the ‘We The UAE 2031’ vision, which calls for concerted efforts to help achieve government objectives and positively impact the society and various sectors of the economy.
The regulation defines a ‘robo-advisor service’ as a digital, algorithm-driven platform that offers automated investment advice and financial recommendations as part of portfolio management to create, manage, and rebalance investor portfolios based on investor-provided information. It also defines ‘algorithms’ as advanced computing software designed to analyze market trends, evaluate investment decisions, and automatically allocate assets according to specific criteria. The aim is to continuously adjust portfolios in response to market fluctuations, investment objectives, and risk appetite.
Under the draft regulation, several provisions will be incorporated into Article 9 of Chapter 5 in Part 3: Doing Business (Portfolio Management). They will detail the requirements that must be met by companies operating automated robo-advisor platforms to ensure the delivery of high-quality services and the adequate protection of investors.
The SCA has invited all stakeholders in the UAE’s capital markets, including market participants, investors, brokers, financial analysts, scholars, media personnel, and others to review the draft regulation and send their feedback by February 14, 2025, to robo-advisory@sca.ae.
