The Securities and Commodities Authority (SCA) has approved new regulations for Robo-Advisor services, marking a strategic move to enhance the digital investment landscape within the United Arab Emirates. This framework aims to foster a more secure digital investment environment and bolster the competitiveness of national financial markets.
The regulatory approval reflects the SCA’s commitment to digital transformation and the advancement of innovative financial services, aligning with global trends and investor expectations. It is designed to accelerate digital adoption, contributing to the UAE’s “We the UAE 2031” vision for a knowledge-based, competitive, and sustainable economy.
Under the new regulations, licensed portfolio management firms are now authorized to offer robo-advisory services exclusively through digital platforms. These platforms must utilize artificial intelligence (AI) technologies and advanced algorithms to deliver automated investment recommendations. The services are mandated to uphold stringent standards of governance, transparency, and investor protection, operating within approved discretionary or non-discretionary portfolio management frameworks and client agreements.
AI-powered robo-advisory services are expected to facilitate the creation of balanced investment portfolios tailored to individual investor goals and risk tolerance, thereby enhancing asset management efficiency and supporting the ongoing digital transformation of the financial sector.
The framework incorporates strict measures for quality performance and investor protection. These include mandatory independent IT audits, rigorous cybersecurity standards, regular reviews of algorithms and systems, and full disclosure of service costs and risks.
Waleed Saeed Al Awadhi, CEO of the SCA, commented that the regulation “is a clear manifestation of our strategic vision to build a forward-looking regulatory framework that keeps pace with the profound shifts in the global financial sector and redefines investor protection standards in line with accelerating digital advancements.” He added that integrating AI into investment decision-making “enhances portfolio management efficiency and unlocks unprecedented opportunities to empower investors with smart, sustainable, and secure financial solutions,” reinforcing the UAE’s position as a global financial hub.
This regulation is a cornerstone of the SCA’s broader strategic initiatives aimed at advancing financial inclusion by expanding access to intelligent and secure investment solutions. The SCA continues to drive efforts to build a resilient, future-ready financial ecosystem anchored in transparency, robust governance, and innovation, in line with global financial transformations.
–Input WAM
