By BUUMBA CHIMBULU
AN innovation to enhance protection of investment in the capital markets called Sandbox has been launched by the Securities and Exchange Commission (SEC).
The Sandbox aims to provide a framework to facilitate for the live testing of capital markets innovations under a controlled environment, designed to protect investors and done over a specified period.
This is designed to protect investors and prevent loss of investment in the capital markets, says SEC Chief Executive Officer, Phillip Chitalu.
Mr Chitalu said yesterday in Lusaka during the launch of the Sandbox that SEC was aware of the need to protect investors while the markets were venturing into the digital world to ensure that capital markets in Zambia could use innovations to develop.
“We are cognisant of the fact that at the centre of developing is to ensure that if people were to invest into your platforms, they will not lose their investments.
“Loss of investments will result in reduced confidence on the market and certainly it will be a nail in the coffin in terms of development. So investor protection is a key objective within the law,” he said.
Mr Chitalu expressed confidence that the Sandbox would enable SEC to address a regulatory gap in the market and assist in embracing innovative capital markets.
He said SEC had in the past two to three years observed a notable interest among the existing capital market players and FinTech aspiring to deploy capital markets innovations that were primarily driven by technology.
Mr Chilufya said SEC however identified a regulatory gap that could not allow it to be on board on the proposed innovations.
He explained that this gave it impetus to think outside the box and emulate successful regulatory bodies pertaining to FinTech and other innovations.
He said SEC therefore identified the Sandbox as an effective tool and quickly embarked on the project to develop guidance for a regulatory sandbox framework in March 2020.
“The guidelines were subsequently issued in December 2020. We are confident that the guidelines will provide a framework to facilitate for the live tests of capital market innovations under a controlled environment.
“We are convinced that the Sandbox is a game changer for the industry,” Mr Chitalu said.
