INNOVATION

CMA admits two additional firms to the Regulatory Sandbox

Platform allows live testing of innovations

In Summary

•The two are Pyypl Group Limited and Belrium Kenya Limited.

•They will test innovations in accordance with the requirements of the Capital Markets Regulatory Sandbox Policy Guidance Notes (PGN).

Acting Capital Markets Authority CEO Wyckliffe Shamiah.
Acting Capital Markets Authority CEO Wyckliffe Shamiah.
Image: COURTESY

The Capital Markets Authority (CMA) has has admitted two more  firms to its Regulatory Sandbox test environment, as it continues to tap on innovation to deepen the country's capital markets.

The two are Pyypl Group Limited and Belrium Kenya Limited.

They will test innovations in accordance with the requirements of the Capital Markets Regulatory Sandbox Policy Guidance Notes (PGN).

Pyypl Group Limited (pronounced as ‘people’) seeks to test its Pyypl for Entrepreneurs product, a blockchain-based platform for issuance of debentures (unsecured bonds) among entrepreneurs for 12 months.

It is licensed by the securities market regulator in United Arab Emirates – Financial Services Regulatory Authority in line with the Regulatory Sandbox PGN.

It’s subsidiaries in Bahrain and Kazakhstan are also active and licensed by the Central Bank of Bahrain and Astana Financial Services Regulatory Authority (Kazakhstan) respectively.

Belrium Kenya Limited has been admitted to the Regulatory Sandbox to test a blockchain-based and shareable know your customer (e-kyc) solution for capital markets intermediaries and investors.

The test will be executed in a period of nine months. It’s parent company Belfrics Malaysia Sdn Bhd is a reporting institution with the Bank Negara Malaysia.

CMA acting chief executive Wyckliffe Shamiah said:"We are encouraged to note the appetite for the Regulatory Sandbox among fintech firms and innovators within and beyond Kenya’s borders."

The move, he said, underscores the need for stronger coordination with financial sector regulators and other government agencies to ensure that there are no gaps or overlaps.

 

"Additionally, such coordination will ensure that scalable solutions touching on multiple sectors can be put in place where necessary. The developments cement the authority’s efforts to leverage technology to drive efficiency in the capital markets value chain," Shamiah said.

He said CMA has relied on cross-border cooperation with peer regulators for fit and proper assessment of the two entities whose parent companies and their directors are incorporated in other jurisdictions, as part of the application review process.

The authority said it will closely monitor the two firms during the testing period, relying on feedback from investors, system logs and periodic reports.

Since the Regulatory Sandbox became operational in March 2019, six companies have been admitted to test their innovations and one company has successfully exited the Regulatory Sandbox and is preparing to roll out the innovation to the wider market.

The Regulatory Sandbox allows live testing of innovations under a less onerous regulatory regime and is expected to attract fintech companies and existing capital markets licensees to test the application of technology to financial services.

Innova Limited, Pezesha Africa Limited and The Central Depository and Settlement Corporation (CDSC) are among entities that have gone into the programme.

Upon exit from the Sandbox, participants could be granted a license or approval to operate in Kenya subject to compliance with existing legal and regulatory requirements.