May 29, 2019

The Securities and Exchange Board of India (SEBI) has released a discussion paper on a framework for a ‘regulatory sandbox’ for fintech testing.

Key highlights of the discussion paper:

  • Definition: Regulatory sandbox would be defined as a live, testing environment where new products, processes, services and business models could be deployed on a limited set of eligible customers for a specified period of time, with certain relaxations in the regulations and guidelines.

  • Objective: The sandbox is intended to serve as a testing ground for new business models and technologies that benefit the investors, Indian markets and the Indian economy at large.

  • Eligibility:
    • To begin with, all market participants that are registered with the SEBI will be eligible to test within the sandbox. At a later stage, SEBI may allow sandbox access to fintech start-ups and other fintech firms as well.

    • To be eligible to be tested in the sandbox, a solution need to show that it directly benefits the investors and poses no risks to the financial markets among other parameters.

Source : The Hindu