Norway to set up FinTech regulatory sandbox
Written by Peter Walker
The Norwegian parliament, Storting, has requested that a regulatory sandbox for the FinTech industry be set up by the end of 2019.
A majority agreed that the sandbox should be established in cooperation with the financial industry and, if appropriate, also include other relevant supervisory bodies such as the Data Inspectorate, the Competition Authority and the Consumer Ombudsman.
“The majority believe that by facilitating new players and new business models, the government can contribute to a more diversified and robust offering of financial services, which in turn reduces systemic risk in financial markets,” read an official document. “Complex regulatory requirements can hinder innovation and competition because new products and services are not realised due to regulatory uncertainty or regulatory compliance.
As part of wider work on capital access, value creation and innovation in the financial markets, the parliament stated that the emergence of FinTech raises questions about whether the regulation is well suited to the technological developments.
“For the authorities, it is a duty to ensure that the regulations do not put unintended obstacles to businesses based on new technology,” read the document. “In addition, the complexity of some well-founded requirements may restrict innovation and competition.”
ICT Norway and Finance Norway recently proposed how a regulatory sandbox can be established, while in March 2018, the EU Commission presented an action plan for FinTech, which stated that its emergence can contribute to financial inclusion and more well-functioning capital markets, but also increased risk.
Various regulators around the world have set up sandboxes since the UK’s Financial Conduct Authority first made the move back in 2016. Earlier this year, the FCA said it was exploring the possibility of a global regulatory sandbox, enabling firms to conduct FinTech tests in different jurisdictions and allowing regulators to work together to solve common cross-border issues.
“The emergence of Bitcoin and other virtual currencies raises a number of new issues, including how to prevent virtual currencies from being used for money laundering and terrorist financing, how to tax them who own and trade in such currency and whether the use of currencies may affect financial stability,” noted the Storting. “The government is following developments closely and will assess the need for measures in light of regulatory developments internationally.”