The FCA has published two key documents relating to the regulatory sandbox initiative:
- eligibility criteria setting out how the FCA will make decisions on which applicants will be able to test in the sandbox
- default standards for sandbox testing parameters setting out details around number of customers and duration.
The FCA has also published a speech by the FCA’s Director of Strategy and Competition, which gives further details about how the sandbox will work. The FCA will initially run two phases of the project a year, allowing it to learn what works before engaging further cohorts.
What this means for you
Firms can apply for the first phase of the sandbox between 9 May 2016 and 8 July 2016. The sandbox will allow unauthorised firms to test their innovation in a live environment without incurring the usual regulatory costs of engaging in an activity which requires authorisation. Authorised firms will be able to get clarity on relevant rules before testing an idea that does not easily fit into the existing regulatory framework.