The Securities and Exchange Regulator of Cambodia (SERC) entered into a memorandum of understanding (MoU) with Cambo Trust Plc to “enhance the implementation of the FinTech Regulatory Sandbox in the securities sector”.
The agreement was signed on 8 December between SERC Director General Sou Socheat and Cambo Trust CEO Chan Sophy, at an accompanying ceremony.
Speaking at the event, Socheat identified “securities sector development” as one of the financial industry’s “strategic goals”, which he said is also a high priority for the government, as defined in the financial sector development strategy 2016-2025.
He explained that SERC places particular emphasis on diversification of securities products and markets, as a key driver of strong performance and prosperity in the sector.
SERC also aims to leverage the fast-growing fintech landscape in the development of the securities market and the wider economy, in line with the Cambodia Digital Economy and Society Policy Framework 2021-2035, he said.
“Today’s signing of the MoU with Cambo Trust is another action aimed at improving the implementation of the FinTech Regulatory Sandbox in the securities sector, by strengthening the capacity of SERC officials and jointly studying the possibility of development of [a] Fintech Regulatory Sandbox Zone for Securities Business[es] in Cambodia, he added.
A “regulatory sandbox” is a framework set up by a regulator to allow live testing of innovative proposals – which are generally not fully compliant with existing legal and regulatory requirements – in a controlled but realistic environment under the regulators’ supervision, usually limited by scale, duration and scope.
“This will definitely be an important input, helping to leverage fintech for the development of the Cambodian securities market,” said Socheat, stressing that the agreement in its current form will only cover research, education and training, and neither the development nor launch of new products or the planned regulatory sandbox regime.
Also at the event, Cambo Trust CEO Kim Jin-seok commented that the next step after the signing would be for his company to begin the feasibility study.
“We wanted the Cambodian market to be placed in the portfolios of global financial players, not only in the management of their funds, but also in their actual operations for their worldwide market. That was a starting point.
“The market has been in great turmoil, this is the best opportunity to be placed in [a] unique position. And I strongly believe that we can achieve that from my experience here.
“[This is] because [of the] well-established financial system [and] fundamentals, ability to cooperate with foreign companies, and [a] progressive mind. We are in discussion[s] with several global players within relevant sectors. So we hope this will come out very soon, he said.
Socheat shared that since he released a “Guideline on [a] FinTech Regulatory Sandbox in the Securities Sector”, SERC has received eight applicants to enter the proposed regulatory sandbox to experiment with innovative financial products and services in the production environment, but within a well-defined space and duration.
“The regulatory sandbox will include appropriate safeguards to limit the consequences of failure and maintain the overall safety and soundness of the financial system. All applications are [currently] under SERC’s consideration,” he said.
