The Communications Authority of Kenya (CA) is inviting comments from the public as it seeks to introduce a framework for a regulatory sandbox.
PUBLIC CONSULTATION: Framework for Emerging Technologies Regulatory Sandbox. A regulatory sandbox is a framework set up by a regulator that allows FinTech startups and other innovators to conduct live experiments in a controlled environment under a regulator's supervision. pic.twitter.com/xuHpRddBY9
— Communications Authority of Kenya (CA) (@CA_Kenya) January 24, 2023
According to the authority, the sandbox is intended to discover innovative applications as well as support their development.
“It is against this backdrop that the Authority is developing this regulatory sandbox with the aim of nurturing and supporting innovation by exploring the application of innovative regulatory solutions.” – Communications Authority of Kenya (CA)
The authority is the regulatory authority for the ICT industry in Kenya, with responsibilities in telecommunications, cyber security, e-commerce, broadcasting and postal/courier services.
CA is also responsible for managing the country’s numbering and frequency spectrum resources, administering the Universal Service Fund as well as safeguarding the interests of users of ICT services.
It is not clear what scope the sandbox will eventually have but it is informed by emerging technologies which pose both opportunities and challenges to the ICT sector, the regulator has said.
Regulatory Sandboxes
A regulatory sandbox can be considered as a tailored regulatory environment for conducting limited scale, live tests on innovative products, solutions and services.
In Kenya, there are already two regulatory sandboxes:
- The Central Bank of Kenya regulatory sandbox
- The Capital Markets Authority of Kenya regulatory sandbox
In particular, Kenya’s financial markets regulator, Capital Markets Authority (CMA), runs a regulatory sandbox with a focus on leveraging technology to deepen the product offering in the capital markets. The sandbox accepts solutions that have the potential to transform the capital markets which include stock markets, bond markets, and forex markets.
Participants admitted into the regulatory sandbox can test their innovations for a maximum of 12 months.
Countries running sandboxes in Africa include:
- Ghana
- Kenya
- South Africa
- Uganda
- Nigeria
The Central Bank of Ghana launched its sandbox most recently in October 2022.
Developed by Emtech Solutions, the Bank of Ghana sandbox operates under what is described as a special exemption, allowance, or other limited, time-bound exception, in a controlled environment under the regulator’s supervision.
You can find the draft framework here
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