The New Sandbox Express Regime in Singapore Under Public Consultation

Background

The FinTech Regulatory Sandbox was launched in 2016 to facilitate live experiments of innovative financial services and business models within boundaries. From this learning curve, the Monetary Authority of Singapore (“MAS”) has proposed the creation of pre-categorised sandboxes, known as the Sandbox Express, in order to allow businesses to experiment more quickly within the defined parameters instead of taking the time to customize this accordingly.

Some of the more pertinent points will be as follows:

1. Initial applicable categories:

  • Insurance Broking
  • Recognized Market Operators
  • Remittances

2. Information to be included in the application

  • Details of the applicant
  • Details of the proposed financial services/product
  • Start & end date
  • A declaration that the applicant will be conducting the specific regulated activity

Sandbox Express: Process

To fast-track, the process of application, the scope of assessment of the MAS, upon attaining the information as specified above, would be limited to the fit and properness of the applicant’s key stakeholders as well as the technological innovativeness of the proposed financial service/product. The proposed timeline for a reply from the MAS would be in the region of 21 days from the date of application. However, this is subject to the application not being overly complex requiring more time for the MAS to assess, failing which the application would be reviewed under the customized sandbox approach.

Application Format for Sandbox Express

Clear and proper disclosures are to be provided to each user, and an acknowledgment needs to be obtained from each user prior to them being onboarded as a customer, the latter of which would include the following information:

  1. Scope, limitation and approved period of the pre-defined sandbox
  2. The entity is exempted from the full legal and regulatory requirements under the relevant Act
  3. The possibility of the product or service being discontinued by the MAS or the entity during the approved period
  4. That for the entity to continue beyond the approved period, this would be subject to it obtaining the relevant regulatory approvals from the MAS
  5. They will not have access to the dispute resolution scheme by the Financial Industry Dispute Resolution Centre

Approved applications will be published on the MAS’ website, though the MAS could withdraw said approvals if the specific entity conducts activities not permitted under the pre-defined sandbox.

During the approved period, the entity is required to submit a progress report every 2 months to the MAS. The format of this is to include the following:

  1. Declaration of adherence to the conditions
  2. The progress of the experiment
  3. Register of issues faced or encountered
  4. Register of enhancements made to the solution relating to the product or service rendered

Specific breakdowns are also given on the applicable categories mentioned in point (1) (a) to (c) above, earlier in this article, and how these would actually be reviewed by the MAS in accordance to the mentioned requirements.

Queries Raised by the Regulators

As per the points mentioned above, the MAS is seeking input and feedback from the public on the following points,

  • The initial set of pre-defined sandboxes, and whether there are other activities regulated by MAS that could be suitable for the Sandbox Express, and if so, what would be the key motivations and possible constructs for each specific pre-defined sandbox
  • The proposed guidelines for Sandbox Express as set out in paragraphs 3.3 to 3.7 of the Consultation Paper
  • The proposed constructs for the insurance broking predefined sandbox.
  • The proposed constructs for RMO pre-defined sandbox
  • The proposed constructs for remittances pre-defined sandbox.

The public consultation will run from 14 November to 13 December 2018. A copy of the public consultation paper is available on the MAS website.

How Argus helps

Reach out to us if you have any question, queries, or points to raise for us to revert on the aforementioned. Being part of the industry, we look forward to hearing your salient points on the above mentioned. Once this new Sandbox Express regime is finalised, we will be happy to assist your business in assessing whether it would be appropriate for this.

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