Innovative businesses in the financial services industry looking to test exciting new financial products and services will be able to apply to the UK’s regulatory sandbox beginning May 9.
The “regulatory sandbox” is the next step for the Financial Conduct Authority (FCA) as part of Project Innovate, a programme that commenced in October 2014 aiming to remove unnecessary barriers to innovation for businesses involved in banking and finance in the United Kingdom. The sandbox marks a significant leap forward in financial services regulation and is the first of its kind, globally. With the launch of Project Innovate, and now the sandbox, the FCA has positioned itself as a forward-thinking regulator keen to promote and support so-called disruptive financial technologies and position the UK as an attractive market for emerging technology companies. Not surprisingly, other regulators have already started to take notice of the FCA’s activites, for example the Australian Securities and Investment Commission has recently announced their own plans to launch a sandbox. We expect that the success of the first cohort of participants in the FCA’s sandbox will be monitored very closely both by the UK financial services industry itself as well as peers and regulators in other jurisdictions.
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