Theory and practice of regulatory sandbox in the context of Fintech -Part 5

The purpose and significance of creating a regulatory sandbox are: (1) shorten the market transformation time of financial innovation and reduce transformation costs; (2) increase financing opportunities for innovative companies; (3) make more products have the opportunity to test and enter the market; (4) enable regulatory agencies to cooperate with innovative companies to ensure that appropriate safeguards for consumer protection are embedded in innovative products and services. The regulatory sandbox is for both authorized firms, known as licensed financial institutions, and unauthorized firms such as start-ups that have not yet obtained financial licenses, and it applies uniform access principles. Similar to the FCA Innovation Center, the access principles of the regulatory sandbox include five aspects, namely, the scope of business (whether the planned new scheme is designed for the financial service industry or support the financial service industry), true innovation (whether the new scheme is novel or significantly different from the existing scheme), consumer interests (whether related innovations are expected to increase consumer interests), actual needs (whether the company has real needs for testing within the sandbox framework), and background research (whether the company has invested appropriate resources to develop new schemes, understand relevant regulations and reduce risks).