What Are the Requirements for Launching a FinTech Company Licensed by the CMA?

Many people have appealing ideas related to financial technology, especially concerning investment and securities. However, the most common question is 'How and where should I start?'

Given the challenges, whether technical or regulatory, we offer this article to clarify the essential points to help you launch your project.

First: Product Identification and Analysis Stage:
In this phase, founders should determine the key specifications of their product, the problem they are trying to solve, and the competitive advantage they will offer. It is also essential to conduct a financial study, even if brief, while considering how the project will generate revenue.

Second: Identifying Legislative Challenges:
The question at this stage is whether permits or licenses are needed to start the project. In this case, the answer is yes, because the innovation involves investment, and the appropriate license from the Capital Market Authority (CMA) is necessary. Founders should also determine whether the product is already licensed or not. If the product is already licensed, they can review the CMA requirements and conduct a gap analysis to identify what needs to be completed to obtain the license.

Currently, the Financial Technology Lab oversees the following products:
Crowd Ownership Financing (graduated and currently in the arrangement activity)
Automated Advisory
Issuance of Debt Instruments and Investment in Them (Sukuk)
Social Trading
Investment Fund and Real Estate Investment Fund Distribution
Consulting Service Using AI
Using Distributed Ledger Technology (DLT) to Arrange Securities Issuance and Custody.

Third: Developing the Minimum Viable Product (MVP):
At this stage, the journey of turning the plan into a practical application begins, where an initial but applicable prototype of the innovation is developed. Our recommendation is not to extend this phase beyond three months to complete the primary features of the project. This is because the prototype can be entirely modified based on updates after seeing the project and presenting it to actual users.

Fourth: Parallel Progress for License Application:
For companies seeking to obtain a license from the Capital Market Authority, there are several requirements that must be met before applying for the license, such as founder details, innovation analysis, and its feasibility study, including financial and market studies. The other components can be worked on in parallel while the file is under review. Therefore, the innovation's readiness percentage can be indicated in the application file for the license.

Fifth: Obtaining Preliminary Approval and Fulfilling Requirements for Starting Operations:
Congratulations! But don't think that you've completed your journey at this stage; the real journey begins now. You can explore articles to learn about the key challenges faced by fintech startups and how to deal with them. At Takween Tech, we accompany you from the early stages and offer the necessary consulting services to launch your product. We continue with you on your success journey by providing our technical products, including customizable platforms for Sukuk, ownership products, fund unit distribution, virtual CTO services, offshore technical support services, and more services to support your success.