CMA approves regulatory policy to guide fintech companiesMay 22, 2019
NAIROBI, Kenya, Mar 26 – The Board of the Capital Markets Authority has approved the Regulatory Sandbox Policy Guidance Note as CMA begins accepting applications for admission of fintech firms to its Regulatory Sandbox.
CMA Chief Executive Paul Muthaura said the Sandbox will help accelerate CMA’s knowledge on emerging technologies, support adoption of an evidence-based approach on regulating and facilitating Kenya’s Capital Markets.
“We welcome fintech firms and innovators to apply for admission to the Regulatory Sandbox. Where they are successful, they will have a 12-month period to deploy and conduct live-tests of their innovative products, solutions and services,” CMA Chief Executive Paul Muthaura said.
The Sandbox Participants will be required to comply with certain minimum regulatory requirements prescribed by law that CMA will then evaluate on the regulatory requirements to be temporarily modified during a sandbox.
The authority then provides guidance where it finds an innovation already exists in the market.
Upon exit from the Sandbox, participants will be considered for grant of an existing applicable license or approval to operate in Kenya subject to compliance with relevant legal and regulatory requirement.
Muthaura added that in case of further clarification on legal and regulatory reform the authority will provide will provide regulatory guidance through the various tools at its disposal ranging from new regulations to guidelines or notices pursuant to Section 12 and 12A of the Capital Markets Act.
“The opportunities created by a robust testing phase will ensure that subsequent regulatory prescription and guidance will be informed by the operational realities and insights gained from the Regulatory Sandbox test.”
Director of Market Operations Wycliffe Shamiah, Director of Market Operations and Head of the Authority’s Sandbox Review Committee added that the Sandbox applicants should be companies incorporated in Kenya, including existing licensees of the Authority.
The foreign applicants, will be required to already have a license by an equivalent capital markets regulator. 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.
“The Sandbox is however not an incubation center and will not be able to receive applications based on ideas that have not been developed to the level of operational testing. The Sandbox will therefore not be considering for admission of purely conceptual proposed products, services or business models” Mr. Muthaura explained.
The Authority concluded that it will treat all non-public information received in connection with a Sandbox application or test as confidential and proprietary to the concerned firms. However, Fintech firms will be responsible for taking applicable measures to protect their intellectual property.