CMA Regulatory Sandbox Ready to Receive Applications

Nairobi, 26 March, 2019…The Board of the Capital Markets Authority (CMA) has approved the Regulatory Sandbox Policy Guidance Note (Regulatory Sandbox PGN) setting the stage for CMA to begin accepting applications for admission of fintech firms to its Regulatory Sandbox.

“We welcome fintech firms and innovators to apply for admission to the Regulatory Sandbox. Where they are successful, they will have a 12-month period to deploy and conduct live-tests of their innovative products, solutions and services”, CMA Chief Executive Mr. Paul Muthaura said. The Sandbox is expected to also 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.

In line with the Authority’s investor protection mandate, Sandbox Participants will be required to comply with certain minimum regulatory requirements prescribed by law. CMA will however assess regulatory requirements to be temporarily modified during a Regulatory Sandbox test on a case-by-case basis. In this context, the Authority will provide guidance where it considers that a proposed innovation is already clearly addressed under existing laws and regulations and therefore not fit for inclusion in the sandbox to avoid the creation of regulatory arbitrage between players rendering equivalent products or services.

Upon exit from the Sandbox, participants will be considered for:

  1. grant
  2. grant
  3. denial of permission to operate in Kenya in light of regulatory concerns identified during the testing phase.

Mr. Muthaura noted that ‘where the testing phase highlights that there is need for a broader legal or regulatory reform, the Authority will provide regulatory guidance through the various tools at its disposal ranging from new regulations to guidelines or notices pursuant to Section 12 and 12A of the Capital Markets Act. “The opportunities created by a robust testing phase will ensure that subsequent regulatory prescription and guidance will be informed by the operational realities and insights gained from the Regulatory Sandbox test.”

The PGN in all events specifies the circumstances in which the Authority can revoke or suspend an approval to participate in the Regulatory Sandbox as well as detailing the scope of regulatory and enforcement actions that can be taken in the event of participant misconduct.

Mr. Wycliffe Shamiah, Director of Market Operations and Head of the Authority’s Sandbox Review Committee noted that “at minimum, Sandbox applicants need to be companies incorporated in Kenya, including existing licensees of the Authority. For foreign applicants, they will be required to already be licensed by an equivalent capital markets regulator.” Fintech firms will be considered for admission based on their documented plans to offer innovative products, solutions or services with the potential to deepen Kenya’s capital markets following successful exit from the Sandbox.

“The Sandbox is however not an incubation centre and will not be able to receive applications based on ideas that have not been developed to the level of operational testing.” The Authority is nonetheless working with existing incubation centres who are in a position to support innovators to develop capital markets-related innovative ideas to a level of maturity at which they can then be admitted into the Sandbox. “The Sandbox will therefore not be considering for admission of purely conceptual proposed products, services or business models” Mr. Muthaura explained.

The Authority will treat all non-public information received in connection with a Sandbox application or test as confidential and proprietary to the concerned firms. However, Fintech firms will be responsible for taking applicable measures to protect their intellectual property.



The Capital Markets Authority (CMA) was set up in 1989 as a statutory agency under the Capital Markets Act Cap 485A. It is charged with the prime responsibility of both regulating and developing an orderly, fair and efficient capital markets in Kenya with the view to promoting market integrity and investor confidence.

The regulatory functions of the Authority as provided by the Act and the regulations include; Licensing and supervising all the capital market intermediaries; Ensuring compliance with the legal and regulatory framework by all market participants; Regulating public offers of securities, such as equities and bonds & the issuance of other capital market products such as collective investment schemes; Promoting market development through research on new products and services; Reviewing the legal framework to respond to market dynamics; Promoting investor education and public awareness; and Protecting investors’ interest. For more information, please contact: Antony Mwangi, Head of Corporate Communications on This email address is being protected from spambots. You need JavaScript enabled to view it.


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