The Ethiopian Capital Market Authority (ECMA) has launched the country’s first regulatory sandbox, providing startups and established companies a flexible legal framework to test innovative capital market products and services with real customers.
During the session held at the Sheraton Addis Hotel, ECMA’s freshly crowned director, Hanna Tehklu, highlighted the need for a dynamic regulatory landscape capable of adopting innovative products for accelerating economic growth. She pointed to potentials inherent in the Sandbox that can help refine products through collaborations between regulators and participants.
“It can also serve as an incubator for ideas,” the DG noted.
Originating in the United Kingdom eight years ago, regulatory sandboxes have since propelled numerous products into global markets, including in India and Australia. These sandboxes also provide authorities with valuable insights for developing regulations that keep pace with emerging technologies.
The ECMA’s sandbox is open to both licensed firms, unlicensed firms involved in licensable activities, technology providers, and startups with market-ready products. Eligibility criteria include innovation, user benefits, the need for a sandbox, and a product ready for testing. Although the sandbox offers regulatory relief, participants must still adhere to overarching legal and regulatory standards that are not waived for testing.
Developed in collaboration with the UNDP, UK firm MPENSA, and the ECMA, the Ethiopian sandbox aims to facilitate the transition of firms into the broader market after successful testing. ECMA will continue to support participants, offering regulatory tools such as Testing Approval Letters (TALs), modified licensing requirements, and, when necessary, waivers.
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