In our recently published article on the Regulatory Sandbox (the "Sandbox") being proposed by the Malta Financial Services Authority (the “MFSA”), we presented that this Sandbox could be a great possibility for financial technology (“FinTech”) startups and businesses in order to conduct a live-testing and start operating within this Sandbox for a specified period of time without having to go through the usual full authorisation processes that are set out by the regulators.
According to the proposed Regulatory Sandbox, FinTech businesses that would like to apply to participate in this Sandbox (the “Applicant”) will need to set out their business plan and describe how their proposed solution meets the following proposed eligibility criteria:
Innovation - The FinTech solution that the Applicant proposes should be innovative or significantly different from current solutions available on the marketplace;
Need for testing - There should be a clear evidence that its participation in this Sandbox is beneficial for its business and the MFSA, and the regulation is ambiguous regarding the FinTech solution of the Applicant;
Readiness of the Applicant - The Applicant should set-up clear objectives and parameters, and should clearly demonstrate that the proposal is ready to be tested within the Sandbox; and
Consumer benefit - The proposed FinTech solution of the Applicant should offer an identifiable and direct benefit or indirect benefit to consumers.
It should be noted that the Regulatory Sandbox is still under consultation and the above information about the eligibility criteria may change.
Feel free to contact us if you would like further information on the proposed Regulatory Sandbox.