The Securities and Commodities Authority has announced the approval of regulations for the “Robo Advisor” service, marking a significant step toward digital transformation and enhancing the efficiency of smart financial services. This initiative aligns with global trends and the expectations of local investors.
This decision is part of the authority’s ongoing transformational projects aimed at boosting the competitiveness of national financial markets, accelerating the adoption of digital solutions, and actively contributing to the goals of “UAE Vision 2031,” which seeks to establish a competitive and sustainable knowledge-based economy.
The new regulations allow licensed companies to exclusively offer Robo Advisor services to their clients via digital platforms that utilize artificial intelligence and advanced algorithms to provide automated investment recommendations. It ensures the highest standards of governance and transparency while protecting investors’ rights within the established frameworks for managing investment portfolios, whether on a discretionary or non-discretionary basis, in accordance with client agreements.
This AI-powered service helps create balanced investment portfolios that align with investors’ goals and risk tolerance, thereby improving asset management efficiency and keeping pace with digital transformation in the financial sector.
The regulatory framework includes stringent controls to ensure performance quality and safeguard investors’ rights, such as contracting independent IT auditors, implementing top-notch cybersecurity standards, conducting regular reviews of the algorithms and systems used, and ensuring full disclosure to clients regarding the nature of the service, its costs, and associated risks.
Walid Al Awadhi, the CEO of the Securities and Commodities Authority, emphasized that this regulation serves as a pivotal point within the authority’s digital transformation roadmap. He noted that the establishment of Robo Advisor services reflects the authority’s strategic vision to create a future-oriented regulatory framework that adapts to fundamental shifts in the global financial sector while redefining investor protection standards in line with rapid digital advancements. Integrating AI into investment decision-making is not merely a technological evolution; it represents a critical shift that enhances portfolio management efficiency and opens unprecedented avenues for investors to access smart, sustainable, and secure financial solutions.
He added that this initiative is a cornerstone of the authority’s commitment to fostering financial innovation and establishing dynamic regulatory frameworks that keep up with market developments and anticipate future challenges, thereby reinforcing the UAE’s position as a global financial hub with high levels of efficiency and investment attractiveness.
The establishment of this service is part of a series of strategic initiatives launched by the authority to promote financial inclusion by expanding access to intelligent and secure investment services, as the authority continues its dedicated efforts to build a resilient and sustainable financial ecosystem based on transparency, governance, and innovation, in line with global changes in the financial sector and enhancing the country’s role in leading the digital economy at both regional and international levels.