CMA admits two new firms to the regulatory sandbox

Director Regulatory Policy and Strategy Luke Ombara with  CMA Head of Marketing for SSA Dr. Alex Mswaka shake hands when the Association of Chartered Certified Accountants and the Capital Markets Authority signed an MoU to undertake joint financial literacy initiatives for an additional period of two years.[Wilberforce Okwiri]

The Capital Markets Authority (CMA) has admitted KOA Save Africa Limited and Moneto Ventures Limited to the Regulatory Sandbox.

The two firms will test their innovations in a live capital market environment, in compliance with the CMA Regulatory Sandbox Policy Guidance Notes (PGN), in line with the commitment to develop and deepen the capital markets by facilitating the deployment of financial technology (fintech).

KOA Save Africa Limited has been admitted to the Regulatory Sandbox to test KOA App. The innovation seeks to help retail investors to easily, conveniently, and affordably, save and invest in the capital markets. KOA App is accessible to iOS and Android mobile users. The fully digital mobile application has the capacity to embed several collective investment schemes focusing on money market funds. KOA Save Africa will test its application for a period of six months.

 Moneto Ventures Limited will test its Chumz App, a digital application also available on iOS and Android mobile devices. It uses behavioural psychology techniques to encourage users to save and build a culture of digital savings and investment. Moneto Ventures seeks to achieve this by ensuring minimum effort between the decision to save and invest, and the actual deposit while helping investors keep track of their progress on specific goals. Moneto Ventures will test its application in the Regulatory Sandbox for one year.

“The Authority is delighted to welcome these new innovations for testing in the Regulatory Sandbox because if these innovations are successful, they will significantly reduce the barriers to entry into the capital markets for retail investors. This can be achieved by making collective investment schemes accessible to investors in a more affordable and convenient manner. Successful testing within the regulatory sandbox will ultimately enhance access, usage and the quality of products in the capital markets by leveraging technology,” CMA Chief Executive Wyckliffe Shamiah. 

Shamiah also observed that the Authority had surpassed its target of admitting five firms to the Regulatory Sandbox by 2023, as outlined in the Authority’s Strategic Plan 2018-2023. The Authority has so far admitted nine firms. CMA recently published a report on the milestones it has achieved in the Regulatory Sandbox since its launch in March 2019.

The regulatory sandbox allows live testing of innovations under a less onerous regulatory regime and is expected to attract fintech companies and capital markets licensees such as stockbrokers, fund managers, investment advisors and CIS to test the application of technology on financial services.

In Mid-May, the Capital Markets Authority approved Safaricom’s mobile investment product dubbed Mali.

Mali is an investment-led application that will allow retail investors to save and invest in securities from their mobile phones.

The product is one of Safaricom’s key pillars as it divests from traditional income streams such as voice and moves into digital financial services. Safaricom Chief Executive Peter Ndegwa last week said the firm was awaiting for approval from the regulators before commercially launching the mobile investment product.

“Mali is currently waiting on decisions from our regulators and we continue engaging them,” Ndegwa said following the company’s investor briefing. As such, we cannot comment on its progress as these conversations are ongoing.”

The move brings the telco a step closer to launching the product that could disrupt retail investing at the Nairobi bourse.