MAS launched Sandbox Express to provide firms with a faster option to test innovative financial products and services in the market. The market testing in the predefined environment of Sandbox Express can be done within 21 days of applying to MAS, instead of taking a longer time to customize sandboxes under the existing FinTech Regulatory Sandbox. MAS also published the guidelines for Sandbox Express and the response to feedback received for the consultation paper on Sandbox Express, which was published on November 14, 2018.
The Sandbox Express was created to complement the FinTech Regulatory Sandbox. Sandbox Express shortens the approval process for entry into the sandbox by relying on standard disclosures and predetermined rules. Hence, Sandbox Express is only suitable for activities where the risks are low and well-understood by the market and can be reasonably managed within predefined parameters. For more complex business models or in cases where MAS requires more time to understand the risks associated with activities, the FinTech Regulatory Sandbox remains open for applicants. The FinTech Regulatory Sandbox, which has been operational since 2016, requires an extensive review of each application, as each sandbox is customized to facilitate meaningful experiments while trying to contain the consequences of failure.
In the beginning, Sandbox Express will be available specifically for insurance brokers, recognized market operators, and remittance businesses. Each sandbox will have predefined boundaries, regulatory reliefs, and expectations. The firms are required to comply with all conditions of approval, including providing clear and proper disclosure to the customer as well as submitting regular progress reports to MAS. The experiments conducted can remain in Sandbox Express for up to nine months. This will provide firms with more time to overcome business and technical challenges during experimentation and will enable MAS to address the potential regulatory challenges. Firms could also use the longer duration to better prepare for exiting the sandbox and deploying their innovation on a larger scale.
Along with the guidelines, MAS published three Annexes containing sandbox constructs, application form, and progress reporting form. Respondents to the consultation for Sandbox Express were broadly supportive of the Sandbox Express to complement the current sandbox approach. They also welcomed the initial set of sandboxes under Sandbox Express as well as the flexibility to update them over time. MAS will take a phased approach by starting with an initial set of regulated activities and will continue to review whether appropriate constructs could be established to facilitate meaningful experiments for other activities it regulates while containing risk. A phased approach will also allow MAS to test the relevance and risks of Sandbox Express as well as resolve potential operational challenges.
Keywords: Asia Pacific, Singapore, Banking, Insurance, Securities, FinTech Regulatory Sandbox, Sandbox Express, FinTech, Testing, MAS
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