Both SAMA and the CMA have recently introduced regulations that regulate the use of emerging financial technology in both the Saudi banking/finance and securities markets.
SAMA’s Regulatory Sandbox licences a limited number of entities to test financial solutions in the Saudi market under SAMA’s control and supervision. The intention is that after a specified period of time and successful testing, a firm will be permitted to implement their solution more widely in accordance with guidelines set by SAMA. As of September 2019, 21 entities have been licensed by SAMA. The Regulatory Sandbox is open to (i) SAMA-licensed Innovators wishing to test a solution covered by its existing permissions (for example, banks and insurance companies), (ii) SAMA-licensed Innovators wishing to test a solution not covered by its existing permissions, (iii) non-licensed local FinTech firms or start-up companies, and (iv) non-licensed international FinTech firms.
In 2018, the CMA issued its Financial Technology Experimental Permit Instructions. These are designed to set out a reduced regulatory burden for innovative business models and emerging technologies that have the potential to transform the financial services industry, such as equity crowdfunding platforms. As of September 2019, and according to published sources, three entities had been licensed by the CMA under the regulations.