The U.K. Financial Conduct Authority (FCA) is planning on rolling out a “regulatory sandbox” that will allow companies to test out new products, services or business models without facing harsh regulatory consequences, said FCA. This new addition is part of the regulator’s year-old Project Innovate, which was designed to boost competition and growth in financial services. The regulator plans on launching the “regulatory sandbox” for testing in spring 2016.
Under its plans, firms that are not licensed will be able to use the sandbox, which will provide a “tailored authorization process” and allow only the testing of products and services. Licensed companies, on the other hand, will be given the confidence that an enforcement action will not follow at a later date in light of testing.
“To promote competition it is vital that we support firms—both regulated and unregulated, whether large incumbent or small start-ups—that want to bring new ideas that can benefit consumers to market,” says Christopher Woolard, director of strategy and competition, FCA. “To build on this work, today we’ve set out our plans to help firms test new ideas to better understand how they may work in practice.”
The authority has also provided a number of additional solutions such as establishing a virtual testing center and adding an authorized company who act as representatives for the entire duration of the testing.