The UK’s financial technology (FinTech) sector generates about £20bn in revenue each year. To ensure that the UK continues to be an attractive and innovative market, promoting competition through disruptive innovation within an appropriate regulatory framework, the FCA has launched a FinTech regulatory “sandbox” (The Sandbox).
The Sandbox offers a tailored authorisation process for new firms in the testing phase and individual guidance for existing firms wanting to test ideas that do not easily fit into the UK’s existing financial services regulatory framework.
The objective of The Sandbox is to allow firms to test innovative products, services and delivery mechanisms in a safe environment without incurring all the normal regulatory costs and consequences of engaging in the activity in question. Firms will also be able to take advantage of tailored on-going support from the FCA.
If a firm wants to launch into the wider market, it will still need to apply for full authorisation and meet the usual conditions. However, it will be much more equipped to do so when the time comes.
In order for a firm to participate in The Sandbox, it must be able to show that its products are genuinely innovative in the UK financial services sector, that consumers will benefit from the ideas and that testing is genuinely required. Applicants will also have to show that they have invested resources in development and risk mitigation and will be required to accept appropriate testing parameters and customer safeguards. Firms have until 8 July 2016 to apply.
This news was posted on 18 May 2016.