The Securities and Exchange Commission of Pakistan (SECP) has issued Regulatory Sandbox Guidelines 2019 to promote innovation in financial sector and encourage startups.
The guidelines are aimed at reducing regulatory obligations through allowing testing of new products, business models, and services in the Regulatory Sandbox. The regulatory sandbox will be available for all the regulated sectors of the SECP i.e. insurance, capital markets, non-banking financial services and overall corporate sector.
The Sandbox is a tailored regulatory environment for conducting limited scale, live tests of innovative products, services, processes, and/ or business models in a controlled environment. Such tests will be conducted under close supervision of the regulator for a specific period so as to assess the viability and compatibility and conducive regulatory environment for the innovative solutions.
Regulatory Sandboxes are becoming increasingly popular regulatory tools internationally. As of now, more than 50 countries have introduced their respective regulatory sandboxes with similar objectives.
The SECP’s Regulatory Sandbox is expected to stimulate financial and technological innovation and help in enhancing financial inclusion and broaden the range of financial products in Pakistan.
