The Capital Market Authority (CMA) opened a public consultation on draft restrictions for algorithmic trading on 24 September 2026. The Authority said the 30-day consultation would close on 24 October and that the final provisions were intended to take effect on 1 November 2026. Those dates describe the proposal’s stated timetable. Until feedback is considered and a final text is approved, the draft should not be described as an operative market rule. This report concerns a consultation still open on 8 October.

The draft’s central numerical test is that, on a single trading day, algorithmic orders in a security listed on the Main Market should not exceed 20 orders for each executed trade. Securities classified as “Very High Liquidity” are excluded. The ratio would be calculated for each trader registered with the Exchange who is responsible for the trading activity of a market member and its clients. It is therefore not a single market-wide daily quota pooling every order; the proposed test has a specified calculation level, product scope and exception.

The proposal also calls for capital-market institutions to maintain systems and supervisory procedures that safeguard the integrity and efficiency of algorithmic trading. Firms would establish methods for developing and testing systems and algorithms before implementation, retain related records, and provide the CMA and Saudi Exchange with requested algorithmic-trading information or data. These provisions describe a governance framework broader than monitoring an order ratio. Because the text remains a draft, they should not yet be treated as final enforceable obligations.

The potential economic effect is conditional. An order-to-trade test may give supervisors a way to address excessive message traffic or automated behaviour that could disrupt trading, but the ratio alone does not prove that a strategy is harmful or that manipulation has occurred. Outcomes would depend on how liquidity categories are updated, how trader-level calculations work, the reach of exceptions and how the controls are supervised. Comments due by 24 October may change the text. The 20-to-one figure in this report is thus a proposal submitted for consultation, not a final regulatory limit.

For market integrity, the proposal’s effectiveness would depend not only on the numerical threshold but also on order classification and consistent handling of breaches. The final rule and implementation guidance may therefore matter as much as the draft ratio itself.