The U.K. Financial Conduct Authority (FCA) opened its “regulatory sandbox” on Monday, which will allow financial services firms to test out innovative products, services, business models and delivery mechanisms.
The sandbox aims to allow firms to experiment in a variety of ways, including by providing: a restricted authorization for new firms to test new ideas; regulatory waivers, or promises of no enforcement action, in certain cases; and guidance for firms considering ideas that don’t fit easily into the existing regulatory framework.
Firms have until July 8 to apply to be in the first cohort of the FCA’s sandbox.
“Supporting innovation is an essential part of our role in promoting competition in the interests of consumers. Our aspiration is that the sandbox not only enables innovative ideas to be tested and brought to market, but also helps to reduce the time and the cost of getting them there,” says Tracey McDermott, acting chief executive at the FCA, in a statement announcing today’s opening.
Last week, Australian regulators announced that they also intend to propose a new registration exemption, the “regulatory sandbox licensing exemption”, that is also intended to allow financial firms to experiment with innovative new products and services that may not clearly fit into its existing regulatory regime.
The Australian Securities and Investments Commission (ASIC) plans to issue a consultation paper proposing the new exemption, along with other measures to facilitate financial innovation, next month.