SEBI introduces framework for Regulatory Sandbox. Eligibility, application & approval process
CIRCULAR
SEBI/HO/MRD-1/CIR/P/2020/95
June 05, 2020
To,
All Stock Exchanges, Clearing Corporations and Depositories
All Intermediaries
Dear Sir/Madam,
Subject: Framework for Regulatory Sandbox
1.Participants in the capital market in India have been early adopters of technology. SEBI believes that encouraging adoption and usage of financial technologies (‘FinTech’) can act as an instrument to further develop and maintain an efficient, fair and transparent securities market ecosystem.
2. Towards this end, SEBI vide circular SEBI/HO/MRD/2019/P/64 dated May 20, 2019, stipulated a framework for an industry-wide Innovation Sandbox, whereby FinTechstartups and entities not regulated by SEBI were permitted to use the Innovation Sandbox for offline testing of their proposed solution.
3. Further, SEBI now has decided to introduce a framework for “Regulatory Sandbox”. Under this sandbox framework, entities regulated by SEBI shall be granted certain facilities and flexibilities to experiment with FinTech solutions in a live environment and on limited set of real customers for a limited time frame. These features shall be fortified with necessary safeguards for investor protection and risk mitigation.
4. The guidelines pertaining to the functioning of the Regulatory Sandbox are provided at Annexure A.
This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 and Section 19 of the Depositories Act, 1996 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.
Yours faithfully,
Bithin Mahanta
Deputy General Manager
Division of Technology & Cyber Security
Market Regulation Department-1
Phone: +91-022-26449634
Email: bithinm@sebi.gov.in
Annexure A
Applicability
Eligibility criteria for the project
Application and approval process
Evaluation criteria
Regulatory exemptions
Submission of test related information and reports
Obligations of the applicant towards the user
Extending or exiting the sandbox
Revocation of the approval
Regulatory Sandbox Application Form
Flowchart: Application and Approval Process
Download Circular Click Here >>
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