CMA admits the 12th company to its innovation hub

By CHARLES MWANIKI
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Summary

• The market regulator set up the incubation platform, designed to encourage innovation in capital markets in May 2019, targeting companies in the fintech sector.
• A robo-adviser is a digital platform that provides automated, algorithm-based financial planning and investment services with little or no human interaction.

The Capital Markets Authority (CMA) has admitted investment adviser Waanzilishi Capital Limited to its regulatory sandbox program, making it the 12th inductee to the innovation hub.

The market regulator set up the incubation platform, designed to encourage innovation in capital markets in May 2019, targeting companies in the fintech sector.

A regulatory sandbox is a safe space in which innovators can test new products and services in a normal environment without the risk of consequences from regulators like the CMA.

“Waanzilishi Capital Limited proposes to test a robo-advisory solution (named Ndovu) with an element of discretionary portfolio management,” the CMA said in a statement.

“The robo-adviser will provide automated financial planning services by tapping its customers’ data on their financial position and future goals through the Ndovu app as the basis for offering investment advice and automatically investing customer assets.”

A robo-adviser is a digital platform that provides automated, algorithm-based financial planning and investment services with little or no human interaction.

Waanzilishi Capital’s advisor is intended to assist clients with account setup and services, customer service, portfolio management and investor education.

The CMA sandbox rules mean that Waanzilishi will be required to provide periodic reports on the implementation of its test plans, achievement of test goals, risks and challenges observed during the testing period, and a final report prior to the test. expiration of his test period.

CMA regulations limit the testing period to 12 months, unless the product, service or solution has been tested positively and has shown that extension of testing is necessary to address specific risks.

Robo advisors are increasingly popular among financial institutions looking to reduce the costs associated with operating expensive call centers and advisory offices.

In 2020, FourFront Management, owned by Standard Investment Bank, also tested a robotics advisory solution on the sandbox program, testing new products for possible deployment in local capital markets.

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