The Capital Markets Authority (CMA) has kicked off the year graduating a firm and admitting another into its regulatory Sandbox.
- •The regulator has approved the exit of Sycamore Capital from the Sandbox while also admitting Frictionless Enterprises Limited into the Sandbox, in the month of January.
- •Sycamore Capital was admitted to the live-testing environment in July 2021.
- •In partnership with licensed fund manager ICEA Lion Asset Managers, it sought to bring together retail investors through Cashlet app, and subsequently direct their investments into registered collective investment schemes.
The Capital Markets Authority Regulatory Sandbox is a tailored regulatory environment that allows for the live testing of innovative capital markets related products, solutions and services with the potential to deepen and develop the capital markets prior to launching into the mass market.
“The regulatory sandbox remains an important tool for the Authority in developing evidence-based policy and regulation by facilitating innovation. However, more strategically, we see it as a driver for growth in the investor base, democratizing wealth and enhancing liquidity in the capital markets,” CMA Chief Executive Officer Wyckliffe Shamiah said.
The objective of the innovation is to spur an investment culture among the youth by providing convenient and low-cost access to unit trust schemes and eliminating traditional paperwork, which are usually barriers for millennials.
- •An intermediary service platform means any electronic application or otherwise which facilitates the marketing and distribution of approved collective investment schemes.
- •This excludes platforms that are deployed by an existing licensed institution for the purpose of improving efficiency.
- •On the other hand, an intermediary service platform provider means any person who operates an intermediary services platform and acts as an intermediary between the fund manager and the investors.
Frictionless Enterprises Limited intends to test Power IO App, a mobile application that enables workers to invest and employers to effectively manage their workforce via the deduction management system provided in the App.
As Power connects to and contracts with employers and gig platforms, users are able to schedule investments from their earnings. This means that an individual could allocate a percentage of their earnings every month to be deposited into a money market fund.
Employers and gig platforms deduct contributions from the Workers’ wages and the Power® solution automatically sweeps the funds into the underlying money market fund.
- •Workers can schedule these contributions to occur each time they are paid, or at their preferred contribution cycle.
- •Frictionless Enterprises Limited will test this application together with Sanlam East Africa Investment Limited as the Fund Manager.
- •The firm will test the innovation in compliance with the provisions of the Capital Markets Regulatory Sandbox Policy Guidance Notes (PGN).
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