The Capital Markets Authority Regulatory Sandbox has so far graduated six enterprises out of the 15 that are listed under the incubation programme, underlining the drive among fintechs to launch capital markets products.
The CMA has midwifed Moneto Ventures Limited, Pezesha Africa Limited, Genghis Capital Limited, Innova Limited, Central Depository and Settlement Corporation (CDSC) and Standard Investment Bank-owned FourFront Management Limited from the sand box.
The CMA launched the incubation programme in May 2019 to facilitate the adoption and implementation of new technologies in the capital markets value chain. 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 the regulators.
The regulator hopes to boost innovation through piloting models in a controlled space before rolling out investment solutions to the wider public to keep abreast with technological advancement while protecting consumers from unregulated products.
“Since we launched the sandbox we have registered 15 applicants out of which six have been released into the market,” CMA Chief Executive Officer Wyckliffe Shamiah said on Tuesday.
The CMA aims to facilitate innovation and fintech adoption within the capital markets industry through the introduction of platforms, software and tools that enhance investment decision-making.
Companies listed at the sandbox are required to provide periodic reports to the CMA on the implementation of test plans, achievement of test objectives, risks and challenges observed during the testing period and a final report prior to the expiry of its testing period.
The CMA regulations limit the testing period to 12 months unless the product, service or solution has tested positive and has shown extending the testing to respond to specific risks.
Mr Shamia says the programme has received new applications with a lot of interest in crypto and blockchain. Traditional capital market products like buying stocks from brokers, fixed income and government securities are being disrupted by new models of onboarding clients and offering.
Businesses targeting the youth are introducing simpler ways to attract investors through mobile platforms.