The Capital Markets Authority of Kenya (CMA) and the Australian Securities and Investments Commission (ASIC) have partnered with the view of promoting innovation in the financial services sector. The agreement will see the regulators share information on their respective markets including on emerging market trends and regulatory issues arising from the growth in innovation. The agreements were signed in Hong Kong during a board meeting of the International Organization of Securities Commissions (IOSCO).
Kenya is keen to compare strategies employed to balance innovation and regulation with other regulators in order to facilitate innovation in financial services. It has recently commenced efforts to establish a Regulatory Sandbox structure that is designed to encourage innovation in the capital markets with a view to introducing new fintech products.
According to both parties, the partnership has been established as a result of the growing need to compare regulatory roadblocks with other regions, with ASIC noting that innovation in the fintech space is not confined by national borders. ASIC launched its innovation hub in 2015, which it said has since received many requests from fintech startups for assistance with regulatory issues.
The Australian regulator has also recently consulted local parties including the Australian government on the establishment of its own regulatory sandbox that proposes an environment to allow startups to test concepts without a licence. The sandbox is expected to enable startups to manage the regulatory risks, providing the probable project outcomes are favourable to Australia.