ISLAMABAD: In order to promote innovation in the financial sector and to encourage startups, the Securities and Exchange Commission of Pakistan (SECP) has issued Regulatory Sandbox Guidelines, 2019.
This would be Pakistan’s first regulatory sandbox in the financial services industry.
“The guidelines are aimed at reducing regulatory obligations by allowing testing of new products, business models and services in the regulatory sandbox,” said a statement issued by the commission. “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 to conduct 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.