Participants in the Regulatory Sandbox

The Ethiopian Capital Market Regulatory Sandbox is crafted to support a broad spectrum of participants, ranging from nascent startups to established institutions. Our goal is to foster a vibrant ecosystem where innovative capital market products, services, and technologies can be safely tested, refined, and potentially scaled to broader markets under the watchful guidance of regulatory bodies.

Who Can Participate?

The sandbox is open to various types of firms that are actively seeking to innovate within the financial services sector of Ethiopia. This includes:

Licensed Firms

These are established institutions that already possess capital market service providers’ licenses from the Ethiopian Capital Markets Authority (ECMA). They include investment banks, investment advisors, exchanges, and brokers. Licensed firms may use the sandbox to test innovative products or services that diverge from their current offerings but still fall under the regulatory oversight of ECMA.

Unlicensed Firms with a Licensable Activity

This category includes firms that are looking to test innovations in a regulated capital market but currently do not hold the necessary licenses. The sandbox offers these firms a controlled environment to test their innovative capital market products or services while they navigate the licensing process, providing a smoother transition into regulated operations.

Currently Unregulated Activities Likely to be Regulated

Firms that propose capital market services or technologies that fall under the regulatory mandate of the ECMA, and which are not currently regulated but are likely to be in the future fall into this category. The sandbox allows these firms to demonstrate their solutions’ effectiveness and compliance in a live environment, aiding regulators in understanding the implications and potential regulatory frameworks needed for such innovations.

Supporting a Regulated Activity

These participants include firms offering technological solutions that support regulated activities, such as risk management systems, compliance tools, or reporting technologies. While these firms themselves might not require a license, their products and services directly enhance the operational efficiency and regulatory compliance of licensed entities.

Supervisory Technology (SupTech) to Support Regulators

Firms that develop technologies intended to improve the supervisory capabilities of the capital market regulator are crucial to the evolution of capital markets. These SupTech solutions may include data analysis tools, surveillance systems, or other technologies that help ECMA enhance its regulatory functions. Such innovations can be tested in the sandbox to refine their functionality and integration with existing regulatory processes.

Ethiopian Capital Market Authority

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