The Securities and Exchange Commission (SEC) has taken a significant step to protect investors and their investments in the capital market through the introduction of a regulatory incubation program for fintech firms. This initiative, aimed at ensuring investor safety, reflects the SEC’s commitment to balancing innovation and regulatory compliance.
Abdulkadir Abbas, the Director of Registration, Exchanges, Market Infrastructure, and Innovation at SEC, highlighted that the regulatory incubation program serves as a transitional framework to enable fintech activities to align with capital market regulations. The primary goal is to provide a platform for new solutions while upholding investor protection as a key objective.
By incorporating fintech ideas that adhere to investment activities defined in the Investment and Securities Act 2007, the regulatory incubation program acts as a crucial screening process before fintech firms are fully integrated. This approach allows the SEC to maintain market integrity while also creating an opportunity to address existing challenges within the market.
SEC Opens Application Portal For Fintech Firms
To facilitate this regulatory incubation program, the SEC has opened an application portal for fintech firms operating or intending to operate in the Nigerian capital market. The SEC has been actively engaging with various fintech applicants, including existing capital market operators and new entrants. The initial assessment form serves as the first stage of onboarding into the program, and numerous applicants have demonstrated substantial interest.
Abbas emphasized that the SEC is particularly interested in fintech companies that provide innovative solutions to existing market problems. The program aims to encourage more fintech to participate, thereby stimulating market growth and fostering the introduction of new products and ideas that can effectively address market challenges.
The regulatory incubation program not only offers fintech firms an opportunity to test their ideas but also safeguards investor interests. Through this initiative, the SEC ensures that emerging fintech solutions conform to regulatory standards, promoting transparency, accountability, and trust in the capital market.
Conclusion
The SEC’s commitment to balancing innovation and investor protection signifies its dedication to fostering a thriving fintech ecosystem in Nigeria. By empowering fintech to develop compliant and investor-focused solutions, the SEC contributes to the growth and stability of the capital market while addressing existing market inefficiencies.
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