Framework for Regulatory Sandbox introduced
- Posted By
21st Oct, 2020
- The International Financial Services Centers Authority (IFSCA) has introduced a Framework for Regulatory Sandbox to tap into innovative FinTech solutions.
- What is a regulatory sandbox?
- It is a safe harbour, where businesses can test innovative products under relaxed regulatory conditions. Typically, participating companies release new products in a controlled environment to a limited number of customers for a limited period of time.
- Under this Sandbox framework, entities operating in the capital market, banking and insurance and financial services space shall be granted facilities to experiment with innovative FinTech solutions in a live environment with a limited set of real customers for a limited time frame.
- These features shall be fortified with necessary safeguards for investor protection and risk mitigation.
- The Regulatory Sandbox shall operate within the IFSC located at GIFT City.
- The creation of an “Innovation Sandbox” is proposed as an additional step towards creating an innovation-centric ecosystem in the IFSC.
- The Innovation Sandbox will be managed and facilitated by the Market Infrastructure Institutions (MIIs) operating within the IFSC.
- IFSCA has an objective to develop a world class FinTech hub at the IFSC in GIFT City, Gandhinagar (Gujarat).
- Thus, it endeavors to encourage the promotion of financial technologies (‘FinTech’) initiatives in financial products and services across the fields of banking, insurance, securities and fund management.
- “Regulatory Sandbox” is a step towards attaining this vision.