The Monetary Authority of Singapore (MAS) has proposed the creation of a new 'express' regulatory sandbox to aid innovation in financial services.
It has published a consultation on 'Sandbox Express', a new initiative that it hopes will enable the introduction of fintech companies' innovative financial services to the market much faster.
A regulatory sandbox where regulators allow companies to try out certain activities they otherwise wouldn’t allow, as long as they are overseen by the regulator and comply with certain rules. MAS already operates financial regulatory sandboxes in Singapore, and the energy regulator operates some relating to 'smart energy'.
Fintech activities that have low or well-understood risks and that could be "reasonably contained within the specific pre-defined sandbox" could choose Sandbox Express, which would consist of pre-defined sandboxes for insurance broking, recognised market operators and remittance businesses, according to MAS.
MAS said each pre-defined sandbox would have pre-determined boundaries, expectations and regulatory reliefs. Applicants must confirm that they could comply with all expectations of the pre-defined sandbox they have applied for, which include their providing disclosure and obtaining an acknowledgement of a targeted client before the person officially begin to receive the company's service.
Applications will be assessed on two criteria, "technological innovativeness of the financial service, and fitness and propriety of the applicant's key stakeholders", MAS said. Approval will be granted within 21 days. An approved pre-defined sandbox company should provide a report to the MAS on the progress and ensure they have followed all the pre-defined sandbox expectations.
Nathanael Lim of Pinsent Masons MPillay, the Singapore joint venture partner of Pinsent Masons, the law firm behind Out-Law.com, said, "the initiative demonstrates Singapore’s commitment to encouraging innovation and managing risks in a balanced manner, and will be warmly welcomed".
The sandbox express will complement the Fintech Regulatory Sandbox that launched in 2016. The consultation will close on 13 December.
