CMA admits Alphabloq to test its real estate platform

Capital Markets Authority (CMA) Chief Executive Officer Wycliffe Shamiah.

Photo credit: File | Nation Media Group

The Capital Markets Authority (CMA) has admitted real estate tokenisation platform Alphabloq Technologies Limited to its sandbox programme to test its model.

Real estate tokenisation refers to the automation of dividing property ownership using smart contracts. Investors can buy or sell part of the asset by trading the tokens.

“The Authority notes that Alphabloq Technologies Limited seeks admission into the regulatory sandbox, pursuant to paragraph 10 of the Capital Markets (Regulatory Sandbox Policy Guidance Note) to test an innovative product, a blockchain-enabled real estate tokenisation platform,” said CMA in a letter to the firm.

“The Authority has reviewed the application in line with the requirements stipulated in the CMA Regulatory Sandbox Policy Guidance Note and hereby admits Alphabloq Technologies Limited to test its innovation for a period of 12 months from the date of this letter.”

A regulatory sandbox is a safe space in which innovators can test products in a normal environment without the risk of consequences from regulators.

During the testing phase, Alphabloq will be required to develop a road map for exit from the regulatory sandbox and commercial rollout of the application as well as conduct regular reviews of the product.

The CMA noted that the admission marks an important stride by Alphabloq in enhancing retail market participation in capital markets products, adding that it will provide access to a highly coveted asset class — real estate.

“Please note that the Authority may, in addition to any other enforcement action, revoke or suspend an approval to participate in the regulatory sandbox at any time before the end of the testing period,” the CMA warned.

Alphabloq’s initiative seeks to foster greater inclusivity in real estate investing irrespective of income levels. The firm also concentrates on properties that can generate quick cash flow, such as those that are fully built or close to completion, thereby reducing investment risks.

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