FCA Regulatory Sandbox Open for Applications to Cohort 6
FCA announced that it is accepting applications from firms for Cohort 6 of its regulatory sandbox until December 31, 2019. The sandbox is open to authorized firms, unauthorized firms that require authorization, and technology businesses that are looking to deliver innovation in the UK financial services market. FCA has identified two technology areas where it would like to see more innovation and testing. Thus, it is welcoming applications from firms using federated learning and traveling algorithms as well as complex scenario modeling and simulation.
The regulatory sandbox allows businesses to test innovative propositions in the market, with real consumers. FCA has specified the eligibility criteria for application and is particularly interested in receiving applications from firms with the following propositions:
- Make finance work for everyone by addressing issues around access, exclusion, and vulnerability
- Support the UK in the move to a greener economy by responding to the challenges posed by climate change
- Use technology to overcome regulatory challenges by helping regulated firms comply with their obligations
To apply for cohort 6 of the sandbox, firms should review the eligibility criteria and submit the completed application form. The sandbox seeks to provide firms with the ability to test products and services in a controlled environment, reduced time-to-market at potentially lower cost, support in identifying appropriate consumer protection safeguards to build into new products and services, and better access to finance. The sandbox provides access to regulatory expertise and a set of tools to facilitate testing. The tools include restricted authorization, individual guidance, informal steers, waivers and no enforcement action letters. FCA closely oversees the development and implementation of tests. Sandbox tests are expected to have a clear objective and to be conducted on a small scale. Firms will test their innovation for limited duration with a limited number of customers.
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Keywords: Europe, UK, Banking, Insurance, Securities, Fintech, Regtech, Regulatory Sandbox, Climate Change, Scenario Change, Scenario Modeling, Cohort 6, FCA
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