Blockchain, crypto applications dominate the CMA incubation unit

Chief Executive of the Capital Markets Authority (CMA), Wyckliffe Shamiah. FILE PHOTO | NMG

The Capital Markets Authority Regulatory Sandbox has so far graduated six firms out of the 15 listed under the incubation programme, underscoring the drive among fintechs to launch capital markets products.

CMA has midwifed Moneto Ventures Limited, Pezesha Africa Limited, Genghis Capital Limited, Innova Limited, Central Depository and Settlement Corporation (CDSC) and Standard Investment Bank-owned FourFront Management Limited from the sandbox.

CMA launched the incubation program in May 2019 to facilitate the adoption and implementation of new technologies in the capital markets value chain. A regulatory sandbox is a safe space where innovators can test new products and services in a normal environment without the risk of consequences from the regulators.

The regulator hopes to boost innovation by piloting models in a controlled space before rolling out investment solutions to a wider audience to stay abreast of technological advances while protecting consumers from unregulated products.

“Since we launched the sandbox, we have registered 15 applicants, six of which have been released to the market,” CMA chief executive Wyckliffe Shamiah said on Tuesday.

The CMA aims to facilitate innovation and fintech adoption in the capital markets industry through the introduction of platforms, software and tools that improve investment decisions.

Companies listed in the sandbox are required to provide periodic reports to the CMA on the implementation of test plans, achievement of test objectives, risks and challenges observed during the test period and a final report before the end of the test period.

CMA regulations limit the testing period to 12 months unless the product, service or solution has tested positive and has demonstrated extending testing to respond to specific risks.

Shamia says the program has received new applications with a lot of interest in crypto and blockchain. Traditional capital market products such as buying stocks from brokers, fixed income and government securities are being disrupted by new models for introducing customers and offers.

Companies targeting youth are introducing easier ways to attract investors through mobile platforms.

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