FCA eyes international sandbox development

The UK’s Financial Conduct Authority (FCA) is 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 current FCA sandbox allows firms to conduct new technology and product tests in the UK, but the watchdog noted that many aspects of financial markets and FinTech are global. The regulator has signed nine bilateral cooperation agreements with other jurisdictions, but it does not currently offer firms the opportunity to participate in a joint sandbox programme with other countries.

The global sandbox could potentially help regulators and firms work together to define the common problems that exist for the international finance community, and collaborate to find innovative solutions. Businesses would benefit from having access to support from multiple regulators in the design and supervision of their tests.

A statement from the FCA said: “Innovation is a powerful way of encouraging greater competition in the market. The global sandbox could allow firms who have ambitions to grow at scale in different markets to bring their idea to market more quickly and easily, creating more effective competition.

“Our experience with the regulatory sandbox in the UK has identified some firms who may benefit from this, and we are keen to hear from firms who could see value in testing their ideas in multiple markets.

The FCA is currently looking for feedback from all interested parties on the viability of the proposals, and ideas for how regulators could collaborate to take it forward.

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