As a strategy of deepening support for innovative solutions in the capital markets industry, the Capital Markets Authority (CMA) is joining twenty-three regulators across five continents to test innovative financial products, services, business models and regulatory technology (RegTech).
The cross-border tests will be conducted under the Global Financial Innovation Network (GFIN), which is an international network of financial services regulators and related organisations, committed to supporting financial innovation. CMA joined GFIN in February 2019. The test environment is designed to give opportunities for regulators to pick lessons from the outcome of the tests and apply them in their respective jurisdictions to catalyze innovative financial markets’ solutions. GFIN is inviting applications from firms to test innovative financial products, services, business models or regulatory technology across more than one country or jurisdiction before 31 December 2020. Application forms can be accessed via GFIN website or CMA website.
GFIN seeks to provide a more efficient way for innovative firms to interact with regulators, helping them navigate between countries as they look to scale new ideas. This includes a pilot for firms wishing to test innovative products, services, or business models across more than one jurisdiction. It also aims to create a new framework for co-operation between financial services regulators on innovation-related topics, gaining insights and sharing different experiences, lessons, and approaches.
The CMA Acting Chief Executive, Mr. Wyckliffe Shamiah, said this is a unique opportunity to support innovation in the capital markets, while appreciating the role of financial technology (Fintech) as a key enabler of enhanced efficiency of the capital markets value chain.
In support of innovations, CMA set up a Regulatory Sandbox in March 2019 and has admitted seven companies. The Regulatory Sandbox is a live testing environment that allows firms to test innovative products, services, and business models in a live market environment, while ensuring that appropriate safeguards are in place. The Sandbox aims to accelerate CMA’s understanding of emerging technologies, support adoption of an evidence-based approach to regulation and facilitate deepening and broadening of Kenya’s capital markets.