The FCA seeks industry feedback to capitalise on global regulatory sandbox trend.

By Stuart Davis and Charlotte Collins

The regulatory sandbox was pioneered by the Financial Conduct Authority (FCA) back in November 2015 — a “safe space” in which businesses can test innovative products, services, business models, and delivery mechanisms without immediately incurring all the normal regulatory consequences of engaging in the activity in question.

The sandbox has been a success to date, helping both existing and new businesses to develop and launch innovative products and business models (see Latham’s previous blog post on the success of the first round of sandbox participants, and Client Alert that tracks the use of the sandbox model across the globe).

By Andrew Moyle, Stuart Davis, and Charlotte Collins

On 15 November 2017, the European Central Bank (ECB) published a newsletter containing an article on how the ECB is dealing with the increasing number of fintech bank applications. The ECB is the banking supervisor, alongside national regulators, for all “significant” banks authorised in Eurozone countries. As such, the ECB is involved with the authorisation of such entities.

The ECB also reports that it is in the process of implementing a fintech hub, which will serve as a central point amongst Eurozone countries for information and questions about fintech.

Acknowledging the need to balance scope for innovation against maintaining appropriate safeguards, such as adequate regulatory capital requirements, the ECB has developed a “Guide to the assessment of fintech bank licence applications”. This guide is meant to help fintech bank applicants better understand the authorisation process and the ECB’s assessment criteria.

By Stuart Davis, Andrew Moyle, Fiona Maclean, Christian McDermott and Charlotte Collins

The Financial Conduct Authority (FCA) has provided an update on its regulatory sandbox initiative. The sandbox is part of Project Innovate, and Toy shovel in sandallows businesses (whether already authorised or not) to test new offerings in the market under close supervision and without many of the usual regulatory consequences.

The first cohort of firms has now finished testing and the FCA states that it expects most firms to take forward their propositions to market, indicating that round one has been a success.

Meanwhile, the FCA has taken on its second cohort of 24 firms, whittled down from 77 applicants. These firms will begin testing shortly. The FCA has published a full list of these firms and short descriptions of what they will be testing on its website.