Sandbox Licensing Regime Faces Uncertainty

Bermuda - The Regulatory Sandbox Framework, aimed at fostering innovation and promoting financial stability, has raised questions about whether the activity can be licensed under an existing licensing regime or if new legislation will be required.

Clarification Needed on Regulation

According to sources, the framework’s terms and conditions are still being finalized, with experts suggesting that clarity is needed on how entities participating in the Sandbox will be regulated once testing is complete.

“We need a clear understanding of what happens after the testing period,” said an industry expert. “Will they be granted a license or will new legislation be introduced? The uncertainty is causing concern among those involved.”

The Regulatory Sandbox Framework was launched earlier this year to provide a safe space for entities to test new products and services.

Terms and Conditions

Under the framework, entities will have 30 working days to provide comment on a draft report issued by the Regulatory Sandbox Review Panel (RRP) after completion of the testing period. The RRP will then publish a summary of its conclusions within 50 working days.

Experts say that while the framework has potential benefits for the financial industry, clarity is needed on how entities will be regulated once testing is complete.

“We need to ensure that the regulatory environment is conducive to innovation,” said another expert. “Uncertainty around licensing and regulation can stifle innovation and hinder progress.”

Goals of the Framework

The Regulatory Sandbox Framework was launched in response to the need for a more agile and responsive regulatory framework, allowing entities to test new products and services in a controlled environment.

Uncertainty Ahead

It remains to be seen whether the framework will achieve its intended goals or if new legislation will be introduced to address regulatory concerns. The uncertainty surrounding licensing and regulation may hinder innovation and progress in the financial industry.