Last Friday the council of ministers approved the Preliminary Bill for Digital Transformation of the Financial System. The next step will be the receipt of technical reports before it goes back to the council of ministers for the final green light. This step might not be completed in this government term which is about to end in a few weeks.
One of the main measures it contains is the creation of a sandbox or controlled test environment which will allow secure conditions to be created for technology based financial innovations to be able to be tested under the surveillance of the banking, securities market and insurance supervisors (Banco de España, CNMV and Dirección General de Seguros y Fondos de Pensiones). All with maximum guarantees for participants, especially where the testing requires the participation of real customers.
In addition to this new test environment, the Preliminary Bill amends the legislation on private equity entities to allow them to invest in financial institutions whose activity is chiefly based on applying technology to new business models, applications, processes or products.