Featured Product

    FCA to Open Second Phase of Digital Sandbox for ESG Solutions

    August 11, 2021

    The Financial Conduct Authority (FCA) updated information on second phase of the Digital Sandbox with The City of London Corporation, to support testing and development of new products and services in the area of environmental, social, and governance (ESG) data and disclosure. Twenty-eight organizations had participated in the first digital sandbox pilot earlier this year, with participating teams presenting the solutions they had developed at a series of demonstration days. Based on the lessons learned from the first phase, for the second update, FCA has added information on eligibility criteria to assess applications to develop a solution in the digital sandbox. The application window for the sustainability cohort will open on September 06, 2021 while the sandbox will be open to successful participants in November and access to the testing environment will be open from January 2022. FCA expects to publish additional information in the coming weeks.

    The eligibility criteria specifies that the solution or product should be sufficiently different from what already exists in the market and should be beneficial for UK consumers or financial services firms by solving one of the ESG data and disclosure use cases. Additionally, the application should proposed a well-designed testing plan, detailing success criteria and future steps. The company does not need to be domiciled in the UK, but the solution needs to be intended for use in the UK market. The purpose of this sustainability cohort is to accelerate innovation and to address the specific market challenges on how technology can be used to 

    • enable transparency in disclosure and reporting on sustainability, especially on the characteristics of corporate assets and the profile of their supply chains (for example, open source and eco-friendly decentralized ledgers, centralized platforms)
    • automate the assurance of a listed issuer’s ESG data and validation of its ESG-labelled corporate bond issuance (for example, Internet of things, decentralized ledgers, centralized platforms, satellite imaging, artificial intelligence)
    • help consumers understand the ESG characteristics of the products and providers they engage with as well as provide visibility around alternatives aligned with their needs and preferences

    In terms of engagement and collaboration, FCA is seeking inputs from established market players, potential end-consumers of the products being developed, sustainability experts, investors, and others who may be able to provide mentorship, guidance, and expertise to the participating firms. FCA is also seeking guidance from data experts in identifying useful real data or creating synthetic data sets for the participants to test and train their models. The following features are the foundations of the Digital Sandbox pilots:

    • Access to synthetic and publicly available data assets to enable testing, training, and validation of prototype technology solutions
    • An application programming interface (API) marketplace where digital service providers list and provide access to services via APIs
    • An integrated development environment, in which applicants can develop and test their solution
    • A collaboration platform, to facilitate an ecosystem of key organizations that will provide support and input to digital sandbox participants, such as incumbents, academia, government bodies, venture capital, and charities
    • 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


    Related Link: Notification


    Keywords: Europe, UK, Banking, Securities, Digital Sandbox, ESG, Reporting, Disclosures, Sustainable Finance, Regtech, FCA

    Featured Experts
    Related Articles

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News

    FASB Proposes Improvements to 2023 GAAP Reporting Taxonomy

    The Financial Accounting Standards Board (FASB) is seeking comments, until November 03, 2022, on the proposed technical and other conforming improvements for the 2023 GAAP Financial Reporting Taxonomy.

    November 03, 2022 WebPage Regulatory News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8588