Online Reporter
Nelson Gahadza-Senior Business Reporter
The Securities and Exchange Commission of Zimbabwe (SecZim) has introduced regulatory sandbox guidelines for live testing of eligible capital market financial technology (fintech) products before they are introduced into the broader market.
SecZim chief executive officer (CEO) Mr Anymore Taruvinga said, in a statement, that the objective was to ensure investor protection, financial market stability and integrity.
Part of SecZim’s mandate entails promoting the development of the securities market.
The regulatory sandbox is expected to facilitate the growth and development of Zimbabwe’s securities market in line with changing technological developments.
“In the context of an evolving operating environment and ever-changing investor needs, the establishment of the regulatory sandbox will therefore facilitate innovators to interact with the market and provide novel solutions to market needs,” he said.
Mr Taruvinga said the proposed sandbox guidelines, based on lessons from regional financial markets, were meant to clearly outline the eligibility, application and testing procedure for qualifying innovations.
“This in turn is also expected to promote the breadth and depth of the market through safer investor-centric products and services, facilitate policy testing and inform the review, update and adaptation of existing legislation to safely accommodate innovative ideas onto the market,” he said.
Mr Taruvinga noted that the sandbox would focus on securities market-related innovations to facilitate ongoing efforts at the national fintech steering committee.
“In this regard, innovations that are specific to the securities market shall be live-tested internally, while hybrid ones shall be live-tested in collaboration with peer regulators.
“This should strengthen the unified criterion towards embracing fintech solutions in the broader financial services sector,” he said.
SecZim believes that the regulatory sandbox will be an evidence-based resource for broader fintech-related policy reforms in the securities market.
By fostering a culture of innovation and collaboration, the SecZim boss said the regulator was paving the way for a more dynamic, inclusive and resilient financial ecosystem in Zimbabwe.
In 2023, SecZim established an innovation office at its headquarters in Harare to bring modernity and innovation to the market.
According to the SecZim guidelines, the regulatory sandbox will complement the innovation office in facilitating and complementing ongoing efforts at the national fintech steering committee level by testing innovations approved by the innovation office.
The key guiding principles for the regulatory sandbox include inclusivity, whereby applicants are encouraged to promote investor-centric products and services aimed at progressing financial inclusion, ease of doing business and market access.
Participants should uphold ethical practices through good market conduct, strong corporate governance, and compliance with legal/regulatory requirements in line with international best practice standards.
In addition, the participants should also put in place appropriate measures to safeguard the interests of investors through timely, equitable disclosure of all material information regarding the proposed innovation.
The commission may waive or relax some regulatory requirements if necessary during the live test.
The sandbox target applicants should be duly licenced securities market intermediaries and unregulated entities that intend to be licenced by the Commission.
Applications for live testing shall only be after authorisation by the Commission for testing in the regulatory sandbox.
SecZim said the regulatory sandbox guidelines were effective November 1, 2024, and the guidelines were subject to review on an annual basis.
It said the review could be more frequent whenever there are material changes to be addressed.
SecZim said all approved applicants were subject to a testing period of at least 12 months. However, SecZim has the discretion to extend the period if need be or upon request by the applicant for a period not exceeding another 12 months.
