The Capital Markets Authority says it is ready to receive applications from financial technology firms and innovators under its FinTech testing platform known as the Regulatory Sandbox.
This is after the board of the Capital Markets Authority approved the Regulatory Sandbox Policy Guidance Note.
The Sandbox is expected to support adoption of an evidence-based approach to regulation and facilitate deepening and broadening of the capital markets.
The Board of the Capital Markets Authority has approved the Regulatory Sandbox Policy Guidance Note setting the stage for the regulator to begin accepting applications from fintech firms to its Regulatory Sandbox.
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Under the programme, fintech firms and innovators will have a 12-month period to deploy and conduct live-tests of their innovative products, solutions and services.
Upon exit from the Sandbox, participants would be considered for grant of an existing applicable license or approval to operate in Kenya subject to meeting the specified terms.
Capital Markets Authority CEO Paul Muthaura says: “where the testing phase highlights that there is need for a broader legal or regulatory reform, the Authority will provide regulatory guidance through the various tools at its disposal ranging from new regulations to guidelines or notices.”
According to the regulator, Fintech firms would be considered for admission based on their documented plans to offer innovative products or services with the potential to deepen Kenya’s capital markets after exit from the Sandbox.
Wycliffe Shamiah, the Director of Market Operations and Head of the Authority’s Sandbox Review Committee notes: “at minimum, Sandbox applicants need to be companies incorporated in Kenya, including existing licensees of the Authority.
For foreign applicants, they will be required to already be licensed by an equivalent capital markets regulator.”
Even though the regulatory Sandbox only targets existing firms, Muthaura says the Capital Markets Authority is working with incubation centers who are in a position to support innovators to develop capital markets-related innovative ideas to a level of maturity at which they can then be admitted into the Sandbox.