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
Previous ArticleMAS Amends Notices 649, 651, 652, and 653 for Banks in Singapore
PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.
SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.
EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.
US Agencies (FDIC, FED, and OCC) issued a joint statement encouraging banks to cease entering into new contracts that use USD LIBOR as a reference rate as soon as practicable and in any event by December 31, 2021, to facilitate an orderly LIBOR transition.
The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS, endorsed a coordinated approach to mitigate COVID-19 risks to the global banking system.
HM Treasury extended the consultation period on Phase II of the Future Regulatory Framework (FRF) Review, from January 19, 2021 to February 19, 2021.
ECB finalized guidance on the way it expects banks to prudently manage and transparently disclose climate and other environmental risks under the current prudential rules.
BCBS published a technical amendment to the capital treatment of securitizations of non-performing loans by banks.
PRA published the policy statement PS23/20 on the calculation of stressed value at risk (sVAR) and risks not in value at risk (RNIV) under the market risk framework.
BoE announced that the Data and Statistics Division is planning to move collection of statistical data to the BoE Electronic Data Submission (BEEDS) portal.