SECP approves technology-driven solutions

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP), under the Second Cohort of Regulatory Sandbox, has granted approval to various innovative solutions, including parametric insurance, real estate asset tokenisation, unified digital distribution of mutual fund application, digital identity/AML/KYC (AI-based) and centralised KYC, a statement said.

The SECP, in pursuance of its reforms agenda to support and encourage Fintech revolution in the country has launched the 2nd Cohort of Regulatory Sandbox, in April 2021.

The 2nd cohort received immense response from a wide range of innovators, including the well-established entities, foreign companies and startups.

Dozens of applications proposing modern solutions and business models were received; however, preference was given to innovation in the areas of security token offerings (STOs), blockchain/distributed ledger, machine learning and robotic processes automation-based solutions. A good number of women entrepreneurs also submitted the applications.

The approved applicants will be allowed live testing and experimentation of business models in a controlled environment for a period of up to six months. At the end of the testing period, the applicants would submit a comprehensive report to the SECP for sharing the overall results and statistics, which will then determine the future course of action for these innovations.

This process will assist in bringing new and beneficial technology products for the end users to the market.

The SECP believes that the testing of technology-driven solutions through the Regulatory Sandbox can stimulate financial and technological innovation and broaden the range of financial products.

Such initiative also supplements the SECP’s vision of enhancing financial inclusion and promotion of Fintech and InsurTech sectors in its regulated domain.

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