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Six enterprises out of the 15 listed under Kenya’s Capital Markets Authority Regulatory Sandbox have been graduated.

The commendable number of graduated firm shows the drive among tech-based firms to launch capital markets products.

The firms that have successfully gone through the CMA’s incubation programme are Moneto Ventures Limited, Pezesha Africa Limited, Genghis Capital Limited and Innova Limited. Others are Central Depository and Settlement Corporation (CDSC) and Standard Investment Bank-owned FourFront Management Limited.

“Since we launched the sandbox we have registered 15 applicants out of which six have been released into the market,” CMA Chief Executive Officer Wyckliffe Shamiah said on Tuesday.

The incubation programme started in May 2019 to spur uptake and implementation of new technologies in the capital markets.

A regulatory sandbox provides a haven for innovators to test new products and services in a normal environment without the risk of consequences from the regulators.

The programme, Mr Shamia noted, has received new applications with a focus on crypto and blockchain.

Traditional capital market products such as buying stocks from brokers, fixed income and government securities are being disrupted by new models of onboarding clients and offering.

Businesses targeting the youth are introducing simpler ways to attract investors through mobile platforms.
The regulator hopes to boost innovation through piloting models in a controlled space before rolling out investment solutions to the wider public to keep abreast with technological advancement while protecting consumers from unregulated products.

The CMA aims to facilitate innovation and fintech adoption within the capital markets industry through the introduction of platforms, software and tools that enhance investment decision-making.
Companies listed at 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 testing period and a final report prior to the expiry of its testing period.

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