In a major step forward for fintech innovation in the region, Saudi Arabia’s Capital Market Authority (CMA) has officially granted InvestSky Holding Limited permission to launch a pilot social trading service. The approval happened after the company successfully met all regulatory requirements under the CMA’s FinTech experimental permit framework.
This new development is part of a broader effort by the CMA to foster financial innovation, support emerging technologies, and offer safer and more transparent market participation options to investors.
What is Social Trading?
Social trading allows users to observe and replicate the investment strategies of experienced traders. It blends financial investing with social networking, giving beginners access to strategies they might otherwise not discover. Platforms offering this service often include:
- ✔️ Real-time trade feeds
- ✔️ Community discussions
- ✔️ Copy-trading features
- ✔️ Educational tools
By enabling this service in a controlled setting, the CMA aims to test the model’s effectiveness and safety before any full-scale rollout.
The Legal and Regulatory Framework
The permit is part of a broader framework outlined under:
- ✔️ Capital Market Law (Royal Decree No. M/30)
- ✔️ Implementing regulations related to financial markets
- ✔️ FinTech experimental permit instructions issued by the CMA Board
InvestSky’s permit was officially approved on February 5, 2024, and represents a regulated path for startups to innovate without compromising market integrity.
Why this Matters
This move is not just a regulatory green light, it’s a signal of confidence in the local fintech ecosystem. Here’s why it’s important:
- ✔️ Supports local innovation by offering a testing ground for new financial products
- ✔️ Enhances investor access by bringing social investing tools to a broader audience
- ✔️ Improves transparency and education, especially for young and retail investors
- ✔️ Encourages competition by opening up the market to diverse trading models
By introducing sandbox-style approvals, the CMA is helping startups bring new solutions to market faster, all while maintaining regulatory safeguards.
What’s next for InvestSky?
InvestSky will now begin live testing of its social trading platform. During the pilot phase, the company is expected to:
- ✔️ Monitor user behavior and platform performance
- ✔️ Submit regular reports to the CMA
- ✔️ Ensure strict compliance with risk and data security standards
If successful, the pilot could pave the way for a wider launch and inspire other fintechs to follow a similar path under CMA guidance.
What would happen next?
The CMA’s approval of InvestSky’s social trading pilot reflects a growing commitment to future-ready finance in Saudi Arabia. By balancing innovation with regulation, the authority is laying the groundwork for a smarter, safer, and more inclusive financial ecosystem.