Markets watchdog Sebi Tuesday proposed a regulatory sandbox for financial institutions wherein exemptions could be provided from various regulations for developing new products and services.
By participating in the sandbox regime, the companies will get an opportunity to test their solutions on real customers/investors. On the other hand, it may help Sebi to frame policies that may reduce the time and cost of deploying new investor-centric solutions in the capital market.
"Sebi plans to introduce a framework, to be called the 'regulatory sandbox'. Under this sandbox 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," the regulator said in a discussion paper.
The regulator further said this discussion paper aims to put forth key principles and proposed approach for operationalising such 'regulatory sandbox.'