FCA has set out its plans to expand Project Innovate by implementing a “regulatory sandbox”. The sandbox will allow businesses to test out new, innovative financial products, services or business models without incurring all the normal regulatory consequences of engaging in those activities. FCA has published this plan in response to a request from Treasury. The report sets out FCA plans for implementing the sandbox (including FCA working with PRA in relation to dual-regulated firms) and proposals for how FCA can work with industry and the government to further support businesses. FCA Director of Strategy and Competition, Christopher Woolard, discussed the range of options the sandbox should contain, including:
- firms can experiment with new products and services if they have the consent of consumers;
- private partners could create a virtual sandbox with FCA encouragement, designed to allow firms to test their business models without being in the real market; and
- FCA could authorise one or more not-for-profit umbrella companies that could allow innovative firms to be their appointed representatives for a period of time.
FCA plans to discuss the sandbox plans at an event in December ahead of testing the proposals in spring 2016. (Source: FCA Expands Project Innovate to Include Regulatory Sandbox)