The Capital Markets Authority (CMA) is planning a study on financial technology (Fintech) innovations to help open up the sector for tech intermediaries.
The proposed regulatory sandbox will allow Fintech start-ups to test and experiment innovations before they are approved as platforms of trade in the market.
This is part of the CMA’s 10-year master plan seeking to promote innovations as a way of growing participants and volumes of trade in the capital markets.
The baseline diagnostic survey, set for first quarter of 2018, will help the CMA identify potential Fintechs and set out the admission criteria into the sandbox.
“The focus of the framework for the Regulatory Sandbox is expected to be capital markets-oriented Fintechs,” the regulator said in a statement to the Business Daily.
“However, given the cross-cutting nature of Fintechs, the survey will also devote a degree of attention to Fintechs and innovations in other key market segments such as payments and banking to determine the complementary role these could play in the capital markets sector.”
The CMA is keen on a Fintech hub, which will serve as one-stop shop for innovators in the financial services sector.
A joint sandbox for capital markets, insurance, pension and saccos will increase efficiency and cut costs for regulators, the CMA has said.
“The Sandbox will create space for investors to tap into the Kenya market and get proof of concept before they start applying and being available to wider investors,” CMA chief executive Paul Muthaura said on September 29.