The Capital Markets Authority (CMA) has given FourFront Management Limited the green light to begin live testing a technology solution that offers investors market information through an algorithm.
FourFront which is a subsidiary of Standard Investment Bank is the seventh financial technology firm to be admitted to the live-test environment which has been established by CMA with the purpose of deepening the financial market.
FourFront proposes to test a robo-advisory a digital platform that provides automated, algorithm-driven financial planning and investing services with little to no human interaction. The solution targets 100 investors during a four-month period.
The firm revealed to the regulator that the technology collects information from its clientele about their financial situation and future goals through an online survey and then leverages the data as a basis to offer investment advice and automatically invest client assets.
The technology aims to offer investors on the Nairobi Securities Exchange easy account setup, account services, portfolio management, and security features, among others with minimal human contact.
“The admission of FourFront Management Limited to the Regulatory Sandbox will build our capacity as a regulator, to respond to the impact and support implementation of new technologies in the capital markets value chain.’ Investment technology is one of the core ways financial technology is likely to disrupt Kenya’s capital markets,” CMA Ag. CEO Wyckliffe Shamiah said.
In compliance with the CMA Regulatory Sandbox Policy Guidance Note 2019, FourFront will be required to provide periodic reports to the authority on the implementation of its test plans, achievement of test objectives, risks and challenges observed during the testing period, and a final report prior to the expiry of its testing period.
The Regulatory Sandbox set up by CMA helps fintechs conduct tests while maintaining the integrity of their systems and data.