‎CMA directs compliance with algorithmic trading rules

Logo Design of Capital Market Authority (CMA)

The Capital Market Authority(CMAtoday provided a circular to all capital market organizations needing compliance with regulative requirements governing algorithmic trading, with the objective of boosting trading stability and performance and restricting possible threats and unfavorable impacts on the capital market.

The circular is based upon a choice released by CMA board, which presented numerous regulative arrangements, most significantly setting an optimum ratio of algorithmic trading orders to performed orders in securities noted on the Main Market, reliable November 1, 2026.

Capital market organizations have actually been given a shift duration to change their operations, ending no behind December 31, 2026, along with requirements to adhere to supervisory controls governing algorithmic trading systems.

The regulator needs capital market organizations to make sure that the ratio of algorithmic trading orders to performed orders for a security noted on the Main Market throughout the open-market session (the 2nd session) does not surpass 20 orders per trading day for each signed up trader and each security individually. The limitation uses according to the category of securities by liquidity levels, consisting of high, medium, low and really low liquidity classifications.

The authority likewise worried the requirement to adhere to Article 54 of the Capital Market Institutions Regulations. This consists of developing and preserving supervisory systems and treatments to guarantee the stability and effectiveness of algorithmic trading and avoid unfavorable results on the marketplace.

Organizations need to likewise develop particular approaches for establishing and checking algorithmic trading systems, algorithms and techniques before their execution and usage. They are needed to put in location supervisory policies and systems to keep an eye on algorithmic trading and efficiently manage sent orders, problem appropriate informs and reports, and allow algorithmic trading systems or algorithms to be closed down when required.

In addition, organizations need to maintain records connected to algorithmic trading and its systems, and offer the CMA and Saudi Exchange (Tadawul) with any associated details or information upon demand.

The circular follows the CMA’s publication, on September 24, 2026, of an assessment paper entitled “Regulatory Provisions on Proposed Restrictions on Algorithmic Trading.” The proposition was released on the merged electronic platform for public and federal government assessments “Istitlaa” and on the CMA’s site for a duration of 30 calendar days to get public feedback.