SERC signs MoU on FinTech rules

THE Securities and Exchange Regulator of Cambodia (SERC) entered into a memorandum of understanding (MoU) with Cambo Trust Plc to “enhance the implementation of the FinTech Regulatory Sandbox in the securities sector”.

The MoU was signed on December 8 between SERC director-general Sou Socheat and Cambo Trust CEO Chan Sophy, at an accompanying ceremony.

Speaking at the event, Socheat identified “securities sector development” as one of the financial industry’s “strategic objectives” which he said is also highly prioritised by the government, as defined in the Financial Sector Development Strategy 2016-2025.

He explained that the SERC places particular attention to the diversification of securities products and markets, as a key driver of strong performance and prosperity in the sector.

The SERC also aims to leverage the rapidly growing fintech landscape in the development of the securities market and broader economy, in step with the Cambodia Digital Economy and Society Policy Framework 2021-2035, he said.

“Today’s MoU signing with Cambo Trust is another action aimed at enhancing the implementation of the FinTech Regulatory Sandbox in the Securities Sector, by strengthening the capacity of the SERC’s officials and studying together the Feasibility on the Development of [a] Fintech Regulatory Sandbox Zone for Securities Business[es] in Cambodia,” he added.

A “regulatory sandbox” is a framework set up by a regulator to allow live testing of innovative propositions – which are generally not fully compliant with existing legal and regulatory requirements – in a controlled yet real-life environment under regulators’ supervision, typically limited by scale, duration and scope.

“This will definitely be an important input, contributing to leveraging fintech for the development of the Cambodian securities market,” Socheat said, stressing that the deal in its current form would only cover research, education and training, and neither the development nor launch of new products or the planned regulatory sandbox regime.

Also at the event, Cambo Trust chief operating officer Kim Jin-seok commented that the next step after the signing would be for his company to begin the feasibility study.

“We wanted the Cambodian market to be placed in the portfolios of global financial players, not only in managing their funds, but also in their actual operation for their worldwide market. That was a starting point.

“The market has been in big turmoil, this is the best opportunity to be placed in [a] unique position. And I have a strong belief that we can achieve it from my experience here.

“[This is] because [of the] well-established financial system [and] fundamentals, collaboration ability with foreign companies, and [a] progressive mind. We are in discussion[s] with several global players in relevant sectors. So we hope this will come out greatly soon,” he said.

Socheat shared that, since issuing a “Guideline on [a] FinTech Regulatory Sandbox in the Securities Sector”, the SERC has received eight applicants to venture into the proposed regulatory sandbox to experiment with innovative financial products and services in the production environment but within a welldefined space and duration.

“The regulatory sandbox will include appropriate safeguards to contain the consequences of failures and maintain the overall safety and soundness of the financial system. All the applications are [currently] under the SERC’s review,” he said.