Promoting innovation in financial services has been at the top of the UK’s regulatory agenda over the last years. The UK’s “pro-innovation” regulatory environment for financial services is considered by many as a key driver of continuing growth of the UK’s fintech sector and a necessary element for ensuring that the UK remains a leading global fintech hub. The Financial Conduct Authority (“FCA”) – which is the UK’s conduct regulator for financial services – has a specific mandate to promote effective competition in the financial services sector for the benefit of consumers. The regulatory sandbox is one of the FCA’s main tools to support innovation and thereby fulfil its competition mandate. The regulatory sandbox allows innovators to test new products in a live market environment in close collaboration with the regulator. In addition to being a valuable testing platform for firms, the sandbox is also a unique forum which fosters cooperation between the FCA and market participants to support innovation. This article explores how the regulatory sandbox has evolved since its introduction in 2016 and offers insights on how it has worked in practice.

By Michael McKee & Marina Troullinou[1]

 

  1. INTRODUCTION

Promoting innovation in financial services has been at the top of the UK’s regulatory agenda over the last years. The UK’s “pro-innovation” regulatory environment for financial services is considered by many as a key driver of continu

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