MAS proposes regulatory sandbox for fintech experiments

The Monetary Authority of Singapore (MAS) has released a consultation paper on proposed guidelines for a regulatory sandbox that will enable financial institutions (FIs) as well as non-financial players to experiment with financial technology (fintech) solutions.

The regulatory sandbox will enable FIs or other firms to experiment with innovative fintech solutions in an environment where actual products or services are provided to the customers but within a well-defined space and duration. For the duration of the regulatory sandbox, MAS will relax specific regulatory requirements which an applicant would otherwise be subject to.

MAS recognises that failure is often a feature of such experiments and the purpose of the regulatory sandbox is to provide appropriate safeguards to contain the consequences of failure for customers rather than to prevent failure altogether.

MAS proposes that applications for solutions to be tested in the regulatory sandbox be assessed on criteria such as the extent of innovativeness of the fintech solution, whether the applicant has the intention and ability to deploy the solution in Singapore on a broader scale as well as whether the solution brings benefits to consumers and/or the industry.

Interested firms are encouraged to approach MAS to discuss how their innovative fintech solutions can be launched in the regulatory sandbox, even while the proposed guidelines are being consulted and finalised.

Jacqueline Loh, Deputy Managing Director of MAS, said, “MAS aims to provide a responsive and forward-looking regulatory approach that will enable promising fintech innovations to develop and flourish. The sandbox will help reduce regulatory friction and provide a safer environment for fintech experiments. We believe this will give innovations a better chance to take root.”

Source: MAS.

Interested?

Read the public consultation paper. The public consultation ends 8 July 2016.