The Securities and Exchange Commission (SEC) in Nigeria has requested financial technology (fintech) companies operating or planning to operate in the Nigerian capital market to register for the Regulatory Incubation (RI) programme.
Notice of Acceptance of Applications for the Regulatory Incubation (RI) Program
Notice available here: https://t.co/JK7qFpWtRV
— SEC Nigeria (@SECNigeria) April 28, 2023
According to a circular from the commission, the portal for the RI program will be accessible to fintech companies from April 28, 2023 – May 26, 2023.
The decision to open a portal is said to be a follow-up to a 2021 notice by the commission on the upcoming launch of the scheme for fintechs. According to the SEC, firms seeking to participate in the program must satisfy five eligibility requirements.
The requirements are:
- Applicants must provide safety for investors
- aAgenuine innovation that introduces a new product/process to serve specific investor needs
- Be able to solve existing compliance or supervisory issues (optional)
- Be ready for testing
“Please provide as much information as possible about how you meet these criteria when submitting your application. If you are looking to test your proposition, you may apply for an engagement session,” it stated.
The circular also notes that fintech companies that operate in areas such as crowdfunding, robo-advisory/digital investment advisory, and sub-broker serving multiple brokers using a digital platform, have been advised not to apply for the regulatory incubation programme as there are already regulations in place for them.
“The Regulatory Incubation (RI) program is designed to address the needs of new business models and processes that require regulatory authorisation to continue carrying out full or ancillary technology-driven capital market activities.
“The RI Program has thus been conceived as an interim measure to aid the evolution of effective regulation which accommodates the innovation by fintechs without compromising market integrity and within limits that ensure investor protection,” SEC added.
The circular emphasized that the following entities are eligible to apply for the program:
- Registered capital market operators
- Unregistered fintech innovators that require regulation
- Firms of all sizes that want to enhance investor participation in the Nigerian capital market
The SEC also noted that specific cohorts will be announced at specific times. For comprehensive guidance on how to apply for admission into the Regulatory Incubation Program, please click here.
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