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.
Previous Article
MAS Introduces Package to Support SMEs Affected by COVID-19Next Article
BCL Updates Documentation for AnaCredit ReportingRelated Articles
US Agencies Finalize Interim Final Rules Issued Amid Pandemic
US Agencies (FDIC, FED, and OCC) finalized two rules, which are either identical or substantially similar to the interim final rules in effect and issued earlier this year.
EIOPA Consults on Use of Risk Mitigation Techniques Under Solvency II
EIOPA is consulting on a supervisory statement on the use of risk mitigation techniques by insurance and reinsurance undertakings.
APRA Proposes to Increase Transparency of Banking Data
APRA announced that it is resuming consultation on the confidentiality of data submitted to APRA by the authorized deposit-taking institutions.
BoE and FCA Encourage Switch to SONIA in Interest Rate Swap Markets
BoE and FCA are supporting and encouraging liquidity providers in the sterling swaps market to adopt new quoting conventions for inter-dealer trading based on SONIA, instead of LIBOR, from October 27, 2020.
Bundesbank Updates Supporting Information for SHS Reporting
Deutsche Bundesbank published special schema files for securities holdings statistics (SHS), along with a document on the XML format description.
EC Deems UK Framework for CCPs Temporarily Equivalent to EMIR Rules
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
ESMA to Recognize Three Central Counterparties from UK
ESMA announced that it will recognize three central counterparties (CCPs) established in the UK as third-country CCPs, from January 01, 2021.
PRA Publishes Version 02.04 of PRA110 Liquidity Metric Monitor Tool
PRA published Version 02.04 of the PRA110 liquidity metric monitoring tool (PRA110 LMM tool).
LEI ROC Confirmed as Governance Body for OTC Derivatives Identifiers
FSB confirmed the Regulatory Oversight Committee (ROC) of the Global Legal Entity Identifier System (GLEIS) as the International Governance Body for the globally harmonized identifiers used to track over-the-counter (OTC) derivatives transactions, with effect from October 01, 2020.
FCA Consults on Regulation of International Firms in UK
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
