The capital markets regulator is inviting Fintech firms to a regulatory environment where the tech companies will test their innovations in a live setting.
A sandbox is a ‘testing environment’ where innovators check the viability of their products and services in a controlled setting. CMA’s regulatory framework will allow successful fintech companies to offer their services in Kenya for 12 months before receiving full approval to operate in the country. Firms that do not meet the set standards will be denied permits to operate in Kenya.
According to a press statement issued by the authority, the regulatory framework will enhance “CMA’s understanding of emerging technologies, support the adoption of an evidence-based approach to regulation and facilitate deepening and broadening of Kenya’s capital markets.”
Participants in the one year CMA program are expected to operate within the guidelines set out in law to protect consumers from negative outcomes. At the end of the program, the companies will either receive approval to operate in Kenya or receive conditional approval or be denied permit to conduct business in the country.
Minimum requirement to participate in the program is a company registered in Kenya; including CMA licensees. Foreign companies will need a license from their Capital Markets Regulator. As per the Head of the Sandbox review committee, Mr. Wycliffe Shamiah, “Fintech firms will be considered for admission based on their documented plans to offer innovative products, solutions or services with the potential to deepen Kenya’s capital markets following successful exit from the Sandbox. “
CMA’s Chief executive officer Paul Muthaura emphasised that the regulatory sandbox is only open to companies with fully developed products ready to be tested in the market. Mr Muthaura said, “The Sandbox is not an incubation centre and will not be able to receive applications based on ideas that have not been developed to the level of operational testing.” However, CMA has partnered with incubation centers to support emerging innovators.
The markets regulator has assured participants of confidentiality but advises fintech firms to take steps to protect their intellectual property.
