The Malta Financial Services Authority (the "MFSA") has recently published a Consultation Document on the ‘Regulatory Sandbox’, which will provide the opportunity for its participants to test the commercial and regulatory viability of their innovations for a specified period of time, and in a fully functional financial services environment. The MFSA will constantly monitor these participants who will operate under a set of conditions and limitations, in order to contain any risks to the said consumers and the financial system.
Such Regulatory Sandboxes have already been established recently in a number of jurisdictions including the UK, and results were very favourable according to the respective National Competent Authorities. Some advantages of the Sandbox include the facilitation of innovation, ensuring effective investor and consumer protection, enhancing firm’s understanding of regulatory expectations as well as knowledge sharing.
The Sandbox will be useful for both established incumbent financial services providers and new entrants, including start-ups, scale ups and technology firms. In fact, it is being proposed that the Regulatory Sandbox will be open to all FinTechs which offer product, process and institutional innovation.
To this effect, on the 30th July 2019, the MFSA has organised a Conference and Workshop to discuss this Consultation Document. The consultation is open to the public until the 30th of August 2019.
Further articles on the Sandbox Regulations will be uploaded on a weekly basis, to provide more detailed information on the Framework, Structure and Lifecycle of the Sandbox as proposed by MFSA.
Please do not hesitate to contact us should you require more information on the Regulatory Sandbox.