Three firms admitted to the CMA Regulatory Sandbox

Paul Muthaura, CEO of the Capital Markets Authority [Photo: Courtesy]

NAIROBI, KENYA: The Capital Markets Authority (CMA) today admitted three IT firms to the CMA Regulatory Sandbox.

The Sandbox is expected to accelerate CMA’s understanding of emerging technologies, support adoption of an evidence-based approach to regulation and facilitate deepening and broadening of Kenya’s capital markets.

Innova Limited has been approved to test its cloud-based data analytics platform designed for use by Investors, Fund Managers, Custodian Banks, Actuaries, Pension Administrators and Regulators.

The second fintech, Pezesha Africa Limited has been approved to test an internet-based crowd-funding platform through which investors can provide loan facilities structured as loan notes (debentures) for Small and Medium Enterprises (SMEs).

The third fintech firm admitted has elected to remain anonymous during its three months’ test period, except to its closed group of test subjects, an option provided in the Regulatory Sandbox PGN.

 “The Regulatory Sandbox allows live testing of innovations under a less onerous regulatory regime and is expected to attract fintech companies and existing capital markets licensees to test the application of technology to financial services. The admission of the three firms is an important milestone noting that the Authority had set itself a target to admit five firms to the Regulatory Sandbox by 2023’, said CMA Chief Executive Paul Muthaura.

CMA granted the three firms 12 months’ period to test their services.

Upon exit from the Sandbox, participants could be granted a license or approval to operate in Kenya subject to compliance with existing legal and regulatory requirements.

The Regulatory Sandbox serves to continuously improve CMA’s understanding of emerging technologies as well as the risks and opportunities that the innovations portend for investors, financial institutions and the regulator. The insights from the tests allow for a more evidence-based approach to regulation.

The Regulatory Sandbox is not an incubation center, physical or virtual space. It is not applicable for proposed products, services or business models that are already clearly addressed under existing laws and regulations.