The Capital Markets Authority (CMA) has admitted KOA Save Africa Limited and Moneto Ventures Limited to the Regulatory Sandbox.
The two firms will test their innovations in a live capital market environment in compliance with the CMA Regulatory Sandbox Policy Guidance Notes (PGN).
CMA has set up this platform as part of its commitment to develop and deepen the capital markets by facilitating the deployment of financial technology (fintech).
What CMA Regulatory Sandbox does
The CMA Regulatory Sandbox enables live testing of innovations under a less strict regulatory space and targets fintechs and existing capital markets licensees to test the application of technology to financial services.
KOA Save Africa Limited has been admitted to the Regulatory Sandbox to test KOA App. The innovation seeks to help retail investors quickly, conveniently, and affordably save and invest in the capital markets.
KOA App is accessible to iOS and Android mobile users. The fully digital mobile application was to embed several collective investment schemes focusing on money market funds. KOA Save Africa will test its application for six months.
Moneto Ventures Limited will test its Chumz App, a digital application also available on iOS and Android mobile devices.
This App uses behavioural psychology techniques to encourage users to save and build a digital savings and investment culture.
Moneto Ventures seeks to achieve this by ensuring minimum effort between saving and investing and deposit while helping investors keep track of their progress on specific goals. Moneto Ventures will test its application in the Regulatory Sandbox for one year.
Wyckliffe Shamiah, CMA Chief Executive, said if these innovations for testing in the Regulatory Sandbox are successful, this will significantly reduce barriers to entry into the capital markets for retail investors.
“This can be achieved by making collective investment schemes accessible to investors in a more affordable and convenient manner. Successful testing within the regulatory Sandbox will ultimately enhance access, usage and the quality of products in the capital markets by leveraging technology,” said Shamiah.
CMA has surpassed its target of admitting five firms to the Regulatory Sandbox by 2023, as outlined in the Authority’s Strategic Plan 2018-2023.
“The Authority has so far admitted nine firms and has already published a report on the milestones it has achieved in the Regulatory Sandbox since its launch in March 2019,” said Shamiah.
The first fintech to be admitted to the CMA Regulatory Sandbox was Innova Limited. It was to do a live test of its cloud-based data analytics software for use by investment bankers, actuaries, regulators and pension managers.
The second fintech, Pezesha Africa Limited, was approved to try out its internet-based crowd-funding platform, allowing SMEs to access loan debentures.
The third fintech firm admitted decided to remain unknown for the three months it was on the Regulatory Sandbox, an option that CMA provides.
Firms admitted in the Sandbox must provide their test plans, objectives, metrics, performance indicators, as well as safeguards and remedial measures for clients. Upon exit from the Sandbox, participants can obtain permits to operate in Kenya upon meeting any other existing regulations.
CMA can also issue a permit subject to conditions set out in a letter of no objection.
Fintechs are admitted based on what they intend to offer in terms of products, solutions and services and how they can assist in deepening Kenya’s capital markets following successful exit from the Sandbox.