FCA Pilots Digital Sandbox to Tackle COVID-19 Challenges
FCA announced its intention to pilot a digital sandbox to provide enhanced regulatory support to fintech and regtech firms tackling challenges caused by the COVID-19 pandemic. FCA is planning the digital sandbox in collaboration with the industry and key strategic partners and is planning to open applications for the sandbox later in the Summer. Shortly, FCA plans to publish specific proposals for launching a coronavirus pilot of the digital sandbox and will ask industry feedback on these proposals.
The regulatory approach of FCA supports innovators and innovative firms through its Innovation Hub, Regulatory Sandbox, and TechSprint program. Prior to the pandemic, FCA had been exploring the concept of a digital sandbox. This would enhance some key features of the innovation services of FCA, allowing innovative firms to test and develop proofs of concept in a digital testing environment. There is also an important convening role for FCA to play in helping to enable greater collaboration to solve complex industry-wide problems. FCA is, therefore, accelerating its plans and will pilot aspects of the digital sandbox on a modular basis to provide support to innovative firms during the crisis. The following features could be the foundations of a digital sandbox:
- Access to high-quality data assets, including synthetic or anonymized data sets to enable testing and validation of technology solutions
- Identification of areas of regulatory interest (as with the latest sandbox cohort) where FCA would like to see innovation play a greater role or issue specific challenges
- A collaboration platform to facilitate diversity of thinking, share lessons learned, and foster an ecosystem around solving complex industry-wide challenges
- An observation deck to enable regulators and other interested parties to observe in-flight testing at a technical level, to inform policy thinking in a safeguarded environment
- Application programming interface (API) or vendor market place where fintech, regtech, and other vendors can list their solutions and APIs, to encourage greater interoperability and foster a thriving ecosystem.
- Access to regulatory support such as development of testing plans, sign posting to relevant regulations, informal steers, or support to understand the wider regulatory environment or the authorization process.
FCA will pilot these features of the digital sandbox and tools to support firms developing specific use cases and will evaluate the effectiveness of a feature or tool through this pilot.
Related Link: Update on Digital Sandbox
Keywords: Europe, UK, Banking, Insurance, Securities, Digital Sandbox, COVID-19, Regtech, Fintech, FCA
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
EBA Updates Filing Rules for Supervisory Reporting
The European Banking Authority (EBA) published version 5.1 of the filing rules for supervisory reporting.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
ECB Amends Guideline on Procedures for Collection of AnaCredit Data
The European Central Bank (ECB) Guideline 2021/1829 on the procedures for the collection of granular credit and credit risk data has been published in the Official Journal of European Union.
EBA Publishes Standards on Disclosure of Investment Policy Under IFR
The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR).
APRA Finalizes Guidance for New Prudential Standard on Remuneration
The Australian Prudential Regulation Authority (APRA) published the prudential practice guide CPG 511 to assist banks, insurers, and superannuation licensees in meeting requirements of CPS 511, the new prudential standard on remuneration.
OCC Updated LIBOR Self-Assessment Tool for Banks
The Office of the Comptroller of the Currency (OCC) published a bulletin that provides an updated self-assessment tool for banks to evaluate their preparedness for cessation of the London Interbank Offered Rate (LIBOR).
TCFD Updates Guidance for Financial Disclosures on Climate Risk
The Financial Stability Board (FSB) published a report that examines the progress made toward disclosures aligned with recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
BCBS Report Examines Progress on Adoption of Basel III Framework
The Basel Committee on Banking Supervision (BCBS) published the progress report on adoption of the Basel III regulatory framework in member jurisdictions.
ACPR Implements Updates Related to DPM Version 3.1
The French Prudential Supervisory Authority (ACPR) has implemented, in its information system, updates linked to the Data Point Model (DPM) version 3.1.
EBA Note Examines Transition Risks of Benchmark Rates
The European Banking Authority (EBA) published a thematic note that aims to identify and raise awareness of the transition risks of benchmark rates, as the London Interbank Offered Rate (LIBOR) and the Euro Overnight Index Average (EONIA) are close to being phased out.
