What is the Regulatory Sandbox?
The Ethiopian Capital Market Regulatory Sandbox is a framework established by the Ethiopian Capital Markets Authority (ECMA) that allows businesses to test innovative capital market products and services in a controlled environment under regulatory supervision. This helps ensure that new technologies are safe and beneficial before they reach the wider market.
Who can apply to the Regulatory Sandbox?
The sandbox is open to a wide range of firms, including:
- Licensed capital market service providers looking to introduce innovative products or services.
- Unlicensed firms planning to engage in activities that require regulation.
- Companies proposing currently unregulated activities that may need future regulation.
- Technology providers that support capital markets but do not require a license themselves.
- Firms developing technologies (SupTech) to enhance regulatory functions.
What are the benefits of participating in the Sandbox?
Participants can test their products in a safe environment with reduced regulatory barriers, receive tailored guidance from regulators, gain credibility with stakeholders, and potentially accelerate their time to market. Participation also provides access to critical infrastructures and databases needed for testing and development. It is important to note that the program does not provide financial aid to program participants.
How does the application process work?
Interested parties should first engage with the sandbox team to discuss their proposals. If deemed suitable, they can submit a detailed application through the designated online platform. Applications are reviewed based on predefined eligibility criteria, and successful applicants will collaborate with regulators to develop and execute a testing plan.
What kind of support does the sandbox provide?
Support includes:
- Testing Approval Letters (TALs) outlining the scope and conditions of the test.
- Modified licensing arrangements where necessary.
- Temporary rule waivers or modifications.
- Individual guidance on regulatory compliance.
- Access to essential databases and infrastructure where necessary.
Are there any specific sectors or technologies that the sandbox is targeting?
While the sandbox is open to all types of financial innovations, it particularly welcomes technologies that can significantly improve financial inclusion, enhance consumer protection, streamline payments and settlements, or strengthen the overall financial infrastructure in Ethiopia.
How long does the testing phase last?
The testing phase can last up to 12 months, but the duration can vary depending on the specific needs of the project and the outcomes of the initial testing phases.
What happens after the testing phase?
Upon completion of the testing phase, participants are required to submit a detailed report of their findings and outcomes. Based on this report, a decision will be made regarding the future of the product or service—whether it can transition to full market deployment, needs further testing, or should cease operations.
Get in touch with us today!
Address :
Minaye Corporate Building 15th Floor,
Flamingo Area, Kirkos
Addis Ababa, Ethiopia
Phone:
+251-11557-8250 / +251-11557-8310
Email: communications@ecma.gov.et