THE FINANCIAL Conduct Authority (FCA) has invited applications from fintech firms wishing to test new financial products across more than one jurisdiction.
Almost a year after the FCA first suggested the idea for a cross-border innovation sandbox, the Global Financial Innovation Network (GFIN) – a group of 29 financial regulators which includes the FCA – has finally opened applications to any firm which wishes to test innovative financial products, services or business models in a live market environment. However, candidates will have to send applications to each relevant regulator in the jurisdictions where they wish to operate.
“The pilot tests will provide a more efficient way for innovative firms to interact with regulators across the world, as they look to scale new ideas,” said the FCA in a statement. “Each regulator will make sure that appropriate safeguards for their jurisdiction are in place for the tests.”
The GFIN was established earlier this month as a space where regulators could share their experience of innovation in various markets. The cross-border testing scheme is the first project to be undertaken by the regulatory group.
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In addition to the FCA, participating members of the GFIN include: the Australian Securities & Investments Commission, the Central Bank of Bahrain, the Bermuda Monetary Authority, British Columbia Securities Commission, Ontario Securities Commission, Québec’s Autorité des Marchés Financiers, the Hong Kong Monetary Authority, the Hong Kong Securities and Futures Commission, Hungary’s Magyar Nemzeti Bank, Kazakhstan’s Astana Financial Services Authority, the Bank of Lithuania, the Monetary Authority of Singapore, Abu Dhabi Global Market, Dubai Financial Services Authority, Guernsey Financial Services Commission and Jersey Financial Services Commission.
“Firms wishing to participate in this pilot phase must meet the application requirements of all the jurisdictions in which they would like to test,” said the GFIN. “For example, a firm wishing to test in the UK, Australia and Hong Kong must independently meet the eligibility criteria, and/or other relevant standards, of the regulators in those jurisdictions.
“Each regulator will decide whether a proposed test meets its individual screening criteria, areas of interest, and ability to support the activity.”
The deadline for UK applications is 28 February 2019. Each pilot test will run for a six month period, which is expected to begin in the second quarter of this year. Extensions to this testing period may be granted at the discretion of the relevant regulator.
“This is part of the FCA’s work to encourage innovation,” said an FCA spokesperson. “Innovation can increase competition and reduce costs, offering consumers better value products and services.”
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