The FCA updated its regulatory sandbox and unveiled the list of firms that were successful in their applications to begin testing in the second cohort of the sandbox. Out of the 77 submissions for this phase, thirty-one applications met the sandbox eligibility criteria and were accepted to develop toward testing.
The current cohort consists of the 24 firms that are ready to begin testing shortly. Tests will be conducted on a short-term and small-scale basis and the FCA has worked with the sandbox firms to agree testing parameters, building in consumer safeguards. Seven firms were not ready to begin testing and may be part of cohort three. The range of firms testing in the second cohort is diverse, covering a variety of geographies and sectors, including wholesale, general insurance, payments, retail banking, and retail lending. Accepted propositions from firms cover a range of ideas, including distributed ledger technology based payment services and artificial intelligence software to observe client behavior and better determine client preferences before financial advice is given.
Applications are being accepted until July 31, 2017 from firms to be part of the third sandbox phase. The FCA would expect all accepted firms to be ready to begin testing from November 2017. The FCA encourages applications from firms of all sizes. As seen by the firms accepted into the first and second cohorts, the sandbox is available to large firms, start-ups, and everything in between. The regulatory sandbox allows businesses to test innovative products, services, business models, and delivery mechanisms in a live environment while ensuring that consumers are appropriately protected. It is part of the Innovate, an initiative that kicked off in 2014 to promote competition in the interest of consumers.
Keywords: Europe, FCA, UK, Fintech, Regulatory Sandbox, Project Innovate, Banking, Insurance, Securities
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