Regulatory 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 for a limited period of time so as to assess their viability to be launched on full-scale, and to determine the compatible and enabling regulatory environment that will be conducive for the innovative solutions.
The Regulatory Sandbox is primarily applicable for new products, services or business models which have not been addressed under existing laws and regulations; or these new ideas bring an innovative approach to the market and there exists considerable uncertainty in terms of unexpected adverse outcomes or existing regulatory framework does not fully address the solutions proposed to be experimented through the regulatory sandbox.
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 Securities and Exchange Commission of Pakistan (SECP), to promote innovation in financial sector and encourage startups, issued Regulatory Sandbox Guidelines in 2019. 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. This is Pakistan’s first Regulatory Sandbox in the financial services industry.
The applicants can apply for inclusion in a cohort which is a complete lifecycle of the regulatory sandbox implementation in which a set of applicants enter in order to test their innovation in a specified time.
The applications for experimentation through the regulatory sandbox can be sent by the following:
(a) All companies registered with the Commission;
(b) Presently unregistered startups with the intent to get registered in case of successful testing in order to scale out to a larger market;
(c) Internationally recognized/ well-known companies or any other persons as deemed appropriate by the Commission
Click here to view SECP Regulatory Sandbox Guidelines, 2019.
Click here to generate Manual Bank challan for Regulatory Sandbox.
The SECP has a dedicated mailbox (sandbox@secp.gov.pk) for any queries with respect to the Regulatory Sandbox.