BY CAROLINE AMOSU
The Securities and Exchange Commission has announced the introduction of its Regulatory Incubation Programme for Fintechs.
It has explained that the basic aim of the programme is to test Fintech ideas without compromising investor protection.
According to Abdulkadir Abbas, the Director of Registration, Exchanges, Market Infrastructure and Innovation at SEC, the programme is designed to facilitate genuine regulation of Fintech activities that conform to the capital market issues.
The RI will provide an avenue where Fintechs can test their ideas without affecting the market integrity and create an opportunity to solve existing problems in the market.
The incubation period will be open for one year, allowing all Fintech ideas that conform to investment activities defined in Investment and Securities Act 2007 to be tested.
However, before onboarding into the RI, there will be an initial assessment to ensure that the Fintech ideas conform to the SEC guidelines.
Abbas stated that the SEC is committed to ensuring the safety of investors and their investments in the capital market, which is one of its cardinal objectives in rolling out the RI.
He added that the takeoff has been very encouraging, with the SEC gaining traction with market participants showing more interest.
The programme will encourage more Fintechs to provide solutions to existing problems in the market while ensuring investor protection.
Furthermore, the announcement noted that there are five legitimacy criteria that Fintechs must meet before onboarding into the RI, among which is having an idea that will bring a solution to an existing problem.
Also, Fintech companies must fill out the initial assessment form and demonstrate to the commission that their proposal or solution conforms to the investment activity under the scope of the ISA.
