Body
FinTechs belonging to this category offer advisory and broking services for investments usually via an internet platform.
Robo advisory services usually offer an investment proposition following a series of questions concerning the personal financial background and the risk-bearing capacity of the user. Sometimes the respective platform also enables the user to directly execute the proposed investment.
Auto-trading concerns all services which automatically trade on behalf of the customer according to his or her specifications.
Apart from that some FinTechs collect and offer merely or as an ancillary service market information or operate comparison portals to increase the transparency of the capital markets and to help the investor with his decision-making.
There are also FinTech-advertising-services which advertise various financial services or products.
Introduction
Attitude of the country towards modern financial advisory and broking services
Saudi Arabia’s financial technology system, while in relatively early stages, is being structured to facilitate the provision of automated services. Specifically, the government has expressed a desire to promote the advancement of e-government transactions, further attracting investors to the sector.
The Saudi Capital Market Authority (CMA) is working to provide a simplified regulatory framework to attract innovative business models and emerging technologies, and has granted various permits to FinTech companies.
Legal affairs
Obligations and requirements to provide financial advisory and broking services, or ancillary services described above
Any entity that intends to test a FinTech product related to securities activities can apply for a FinTech ExPermit, even if it is not a Market Institution authorized by the CMA. The initial step is filling out a FinTech ExPermit Application from the CMA website.
The FinTech ExPermit provides a two year testing period to experiment the FinTech product. Upon completion of the testing, the applicant can choose to either: (i) execute an exit strategy; or (ii) proceed to deploy the FinTech product on a wider scale based on a proposed strategy. To accomplish this both the authority and the applicant must be satisfied with the achievement of the intended test outcomes of the FinTech ExPermit. Moreover, the applicant must be able and willing to fully comply with Capital Market Law and its Implementing Regulations.
Additional comments regarding the legal situation for financial advisory and broking services, or adjacent services or what FinTech’s must be aware of in this business area
The process of establishing a legal entity in KSA is a simple but detailed process. During submission of the application, the presence of a legal entity is not required, but after approval of the application, the applicant – including foreign companies – must establish a legal entity in KSA prior to commencing the FinTech activity.
Economic conditions
Market size for financial advisory and broking services as well as adjacent services and biggest companies in this business area