Fintech Regulatory Sandbox: Participants Must Voluntarily Surrender Approval

In an effort to ensure the stability of Jamaica’s financial system, participants in the country’s Fintech Regulatory Sandbox have been instructed to voluntarily surrender their approval to operate within the sandbox, subject to meeting certain conditions.

Requirements for Surrendering Approval

Participants must clearly demonstrate that they have addressed the interests of their customers to the satisfaction of the Bank of Jamaica (BOJ). This includes:

Implementing measures to protect customer information
Ensuring that their products or services do not pose a risk to financial stability

The BOJ reserves the right to revoke approval without prior notice in cases where there is an urgent need to protect the financial system, participants, their customers, and the general public. Participants may challenge the decision through a written response submitted within 30 business days of the effective date of revocation.

Revocation of Approval

Upon revocation of an approval, participants are required to:

Immediately cease providing their product or service
Notify customers of the cessation and provide redress where relevant
Comply with obligations imposed by the BOJ to securely store or dispose of confidential information
Compensate customers who suffered financial losses during testing in accordance with safeguards submitted by the participant
Submit a report to the BOJ on the actions taken after revocation

Safeguards

To ensure the safety and soundness of the financial system, participants must implement several safeguards, including:

Client limits: setting limits for the number of clients in the sandbox
Exposure limits: ensuring that the financial liability exposure of their business does not exceed a prescribed limit agreed with the BOJ
Consumer protection: developing and implementing consumer protection and disclosure mechanisms
Dispute resolution: establishing processes to resolve customer complaints
Risk management: implementing robust risk management arrangements

Final Report and Approval

After completing testing in the sandbox, participants must submit a final report to the BOJ containing key outcomes, performance indicators, and findings of testing. The BOJ may approve deployment of the product or service to the market on a wide scale with specific conditions or prohibit deployment due to unsuccessful testing or unintended negative consequences.

Conclusion

The Fintech Regulatory Sandbox is designed to provide a safe and controlled environment for innovative financial products and services to be tested and refined, while ensuring that they meet regulatory requirements and do not pose a risk to financial stability. By implementing safeguards and voluntarily surrendering approval, participants can ensure the success of their testing and deployment in the sandbox.