The Capital Markets Authority (CMA) has announced the admission of FourFront Management Limited to the Regulatory Sandbox.
This brings the total number of firms admitted to the live-testing environment for capital markets innovations to seven.
The fintech firm is a wholly owned subsidiary of Standard Investment Bank (SIB), a licensed investment bank.
It has proposed to test a robo-advisory solution targeting 100 investors during a four-month period.
A robo-advisor is a digital platform that provides automated, algorithm-driven financial planning and investing services with little to no human interaction.
“The admission of FourFront Management Limited to the Regulatory Sandbox will build our capacity as a regulator,” said CMA Acting Chief Executive Wyckliffe Shamiah.
Investment technology is one of the core ways financial technology is likely to disrupt Kenya’s capital markets.
Stockbrokers and custodians are leveraging economies of scale to roll out low-cost, or even zero-cost portfolio management platforms, or to partner with robo-advisors to enhance financial access, quality and inclusion.
In line with the CMA Strategic Plan 2018-2023, CMA aims to facilitate innovation and fintech adoption within the industry through the introduction of platforms, software and tools that enhance investment decision-making and contribute to accelerating the shift towards passive investments.
In compliance with the CMA Regulatory Sandbox Policy Guidance Note 2019, FourFront will be required to provide periodic reports to the Authority on the implementation of its 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.
