BCB Issues Guides for Open Banking and Regulatory Sandbox Operations
BCB and the National Monetary Council (CMN) published resolutions to establish guidelines for the operation of controlled test environments for technological innovations in the financial sector (regulatory sandbox). The resolutions also provide for the conditions for the supply of products and services tested under this environment's framework, within the scope of the National Financial System (SFN) and the Brazilian Payment System (SPB). The resolutions entered into force on December 01, 2020. BCB also published a resolution, which takes effect from its publication date, that establishes technical requirements and operational procedures for the implementation of open banking in Brazil.
The Regulatory Sandbox is an environment where entities are licensed by BCB to test, for a certain period, an innovative project in the financial or payment areas, observing a specific set of regulatory provisions. The implementation of the Regulatory Sandbox is intended to promote the entry of innovative business models, competition, and financial inclusion as well as to enhance the supervision process of BCB. To be licensed to operate within the Regulatory Sandbox environment of BCB, the institutions—in addition to carrying out their transactions with integrity, reliability, security, and confidentiality—must comply with the regulation on the prevention of money laundering and combat of the financing of terrorism and the handling of complaints of their clients and users. Moreover, the institution licensed to test a product/service has to disclose, to its customers, that its products and services are being offered within the scope of the Regulatory Sandbox. The Regulatory Sandbox will be implemented through cycles, whose duration will be determined by BCB and limited to the period of one year, with the possibility of one extension for the same period. The first cycle is scheduled for 2021.
Related Links
- Press Release on Regulatory Sandbox
- BCB Resolution on Regulatory Sandbox (PDF)
- CMN Resolution on Regulatory Sandbox (PDF)
- BCB Resolution on Open Banking (in Portuguese)
Effective Date: December 01, 2020 (Regulatory Sandbox Resolution)/Publication Date (Open Banking Resolution)
Keywords: Americas, Brazil, Banking, Regulatory Sandbox, Open Banking, AML/CFT, Regtech, CMN, BCB
Previous Article
APRA Proposes to Align Capital and Reporting Frameworks with AASB 17Related Articles
EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
BCBS and EBA Publish Results of Basel III Monitoring Exercise
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
PRA Updates Timeline for Final Basel III Rules, Issues Other Updates
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
US Treasury Sets Out Principles for Net-Zero Financing
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
EC Launches Survey on G7 Principles on Generative AI
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
