SEBI proposes regulatory sandbox regime for FinTechs


To boost the development and adoption of FinTech solutions, the market regulator Securities and Exchange Board of India (SEBI), has floated a discussion paper on ‘Regulatory Sandbox’.


By participating in the Regulatory Sandbox regime, FinTech companies can deploy new products, processes, services and business models on a limited set of customers for a specified period of time with certain relaxations in SEBI regulations and guidelines.

The regulator said in a discussion paper that, “SEBI plans to introduce a framework, to be called the Regulatory Sandbox. Under this framework, financial institutions regulated by SEBI shall be granted certain facilities and flexibilities to experiment with FinTech solutions in a live environment and on real customers.”

This discussion paper aims to put forth key principles and proposed approach for operationalising such regulatory sandbox, the regulator further added.

Earlier this month, the regulator had proposed ‘Innovation Sandbox’, a testing environment where FinTech firms can experiment innovations in a closed environment, with historical data.

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