New non-securities financial advisory rules in Saudi Arabia

In a move aimed at enhancing transparency and improving the efficiency of the financial sector in Saudi Arabia, the Saudi Organization for Certified Public Accountants (SOCPA) has approved a new set of regulations governing the practice of financial consulting (excluding securities). This decision comes as part of ongoing efforts to regulate freelance professions and develop the investment environment in line with the objectives of Vision 2030, which seeks to create a professional and reliable business environment.

The context of the organization and its economic importance

This step is of paramount importance in the Kingdom's current economic context, as the Saudi market is experiencing rapid growth that necessitates highly qualified and professional financial advisors. The new regulations aim to eliminate haphazard practices in financial advisory services and protect investors' and companies' funds from inaccurate guidance that could lead to significant financial losses. Regulating this sector is a fundamental pillar for enhancing confidence in the local market and attracting foreign investment seeking a clear and well-regulated legal environment.

Licensing conditions and competency requirements

The new regulations stipulate that the profession may only be practiced after obtaining an official license, with the exception of previously licensed certified public accountants. The authority has established strict standards to ensure the quality of outputs, most notably:

• The applicant must be a Saudi national and of full legal capacity.
• Obtain a bachelor’s degree or equivalent in accounting, finance, or funding.
• Provides at least five years of practical experience in relevant fields, whether in the public or private sector.
• Passing the tests and qualification programs approved by the authority.

The Authority also made available the option of licensing for part-time employees for a period not exceeding three years, which opens the door to benefiting from diverse national expertise in this field.

Professional commitments and transparency

To ensure the highest levels of integrity, the regulations require licensees to maintain a dedicated register containing all professional data and to retain working papers and reports for a minimum of five years. The regulations also emphasize the necessity of impartiality and objectivity, prohibit the submission of any misleading or inaccurate reports, and stress that professional responsibility is personal and cannot be delegated in signing final reports.

Sanctions and oversight

As part of its sector governance framework, the Authority has established a graduated system of penalties for violators, ranging from warnings to permanent license revocation, while allowing the right to appeal to the competent judicial authorities. Licensed offices and companies will be subject to periodic monitoring to ensure their compliance with standards, thus guaranteeing the continued quality of services offered in the Saudi market.