Capital Markets

CMA admits seven firms into innovation segment

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Capital Markets Authority chief executive Wyckliffe Shamiah. FILE PHOTO | NMG

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Summary

  • The Capital Markets Authority (CMA) has admitted seven firms into an innovation hub where they will test new products for possible rollout in the local capital markets.
  • A regulatory sandbox is a safe space in which innovators can test new products and services in a normal environment without the risk of consequences from regulators like the CMA.
  • It is usually availed to businesses to experiment with new fintech solutions with relaxed regulatory requirements.

The Capital Markets Authority (CMA) has admitted seven firms into an innovation hub where they will test new products for possible rollout in the local capital markets.

The regulator said Pezesha Africa, Innova Limited, Genghis Capital Limited, the Central Depository and Settlement Corporation (CDSC), Pyypl Group Limited, Belrium Kenya Limited and Four Front Management have so far been listed on its regulatory sandbox which is designed to encourage innovation in the capital markets.

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

It is usually availed to businesses to experiment with new fintech solutions with relaxed regulatory requirements.

CMA said it had received 24 applications on robo-advisory, blockchain technology, tokenization of real estate, providing access to global stocks, crowdfunding platforms, electronic Know Your Customer platform, screen-based security lending and borrowing platform, regtech solutions and data analytics - seeking to be admitted to the regulatory sandbox.

CMA CEO, Mr Wyckliffe Shamiah said the authority will focus on reviewing its supervisory and regulatory model to accommodate the fast-changing environment across the capital markets’ product, services design and infrastructure.

“CMA has been at the forefront of implementing initiatives to stimulate and support the growth of fintech and innovation within Kenya’s capital markets. In line with its facilitative role, the authority seeks to provide a conducive regulatory environment for the deployment of innovative fintech and business models that have the potential to deepen capital markets in Kenya.” The approval restricts the testing period to 12 months, unless the product, service or solution has tested positively and has shown extending the testing is necessary to respond to specific risks.