May 28, 2019: Participants in the capital market in India have been early adopters of technology. SEBI believes that encouraging adoption and usage of financial technology (‘FinTech’) would have a profound impact on the development of securities market. FinTech can act as an instrument to further develop and maintain an efficient, fair and transparent securities market ecosystem.
With a view to facilitate the development and adoption of innovative FinTech solutions, SEBI vide circular SEBI/HO/MRD/2019/P/64 dated May 20, 2019, stipulated a framework for an industry-wide Innovation Sandbox. Under this framework, FinTech startups and entities not regulated by SEBI may use the Innovation Sandbox for offline testing of their proposed solution, subject to fulfillment of the eligibility criteria.
Moving a step ahead in the same direction, SEBI plans to introduce a framework, to be called the ‘Regulatory Sandbox’. Under this sandbox framework, financial institutions regulated by SEBI shall be granted certain facilities and flexibilities to experiment with FinTech solutions in a live environment and on real customers. These features will be fortified with necessary safeguards for investor protection and risk mitigation.
Accordingly, this discussion paper aims to put forth the key principles and proposed approach for operationalizing such ‘Regulatory Sandbox’. SEBI invites written comments on the sandbox framework proposed in this discussion paper. Further, SEBI would like to encourage and invite any general comments on the proposals, including suggestions for additional information/clarification on any particular area of the framework and any alternative proposal that SEBI should consider. In order to facilitate fast assessment and implementation, interested participants are requested to please support each comment with a clear rationale and underlying evidence or illustration, as the case may be.
Interested parties are requested to provide their comments latest by June 18, 2019 at the email address : email@example.com or in writing at the following address:
Shri. Bithin Mahanta
Deputy General Manager
Market Regulation Department,
SEBI Bhavan, Plot No. C4-A, G-Block,
Bandra Kurla Complex, Bandra (E),
Mumbai, India - 400051
CHECK OUT THE DETAILED DISCUSSION PAPER IN SEBI WEBSITE
SEBI portal » Reports » Reports » Reports for Public Comments » Discussion Paper on Framework for Regulatory Sandbox