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MAS ISSUES FINTECH REGULATORY SANDBOX GUIDELINES

On 16 November 2016, the Monetary Authority of Singapore (“MAS”) published its “regulatory sandbox” guidelines (the “Guidelines”) to encourage and enable experimentation by firms and financial institutions of solutions that utilise technology innovatively to deliver financial products or services (“FinTech Solutions”). The regulatory sandbox approach was first announced on 6 June 2016, and is aimed at creating a safe and conducive space for firms to experiment with new FinTech Solutions.

The Regulatory Sandbox
A regulatory sandbox is a controlled environment customised according to the specific legal and regulatory requirements MAS is prepared to relax for each case, depending on factors such as the applicant, the particular
FinTech solution involved, and the proposal made to MAS. It is envisioned as a well-defined space and duration for FinTech solutions to be launched, such that any consequences of failure can be contained. MAS will work closely with applicants in the evaluation and experimentation process.

The Guidelines
The Guidelines set out the objective and principles of the regulatory sandbox, and provide guidance on the application process and information to be furnished to MAS. According to MAS, the aim of the Guidelines is to improve the clarity, flexibility and transparency of the regulatory sandbox.

The Guidelines comprehensively sets out the main evaluation criteria which will be used by MAS to assess applications, with examples and elaborations on the necessary supporting information. A number of evaluation criteria have been relaxed, allowing room for adjustments during experimentation as firms learn from market responses.

Examples of legal and regulatory requirements MAS may consider relaxing or intends to maintain for the duration of the regulatory sandbox are annexed to the Guidelines, together with an application template and a case study, to provide guidance on the application and approval process. Relevant information of approved regulatory sandbox applications will also be published on the MAS website.

Sandbox Applications
Applicants are expected to have conducted due diligence prior to submission of an application, including knowing the legal and regulatory requirements for deploying the proposed FinTech solution and the testing of the proposed FinTech solution in a laboratory environment. No administrative charges are payable for submitting an application. MAS will inform applicants on the potential suitability of their FinTech Solution for a regulatory sandbox within 21 working days of receiving the application, provided that the application includes complete set of information necessary for assessment by MAS.

Ms. Jasselyn Seet Si Lin
Legal Associate (Corporate Practice)
T: (65) 6322 2208
F: (65) 6534 0833
E-mail: jasselynseet@loopartners.com.sg
Ms. Yau Khai Ling
Partner (Corporate Practice)
Foreign Practitioner Certificate
T: (65) 6322 2205
F: (65) 6534 0833
E-mail: yaukhailing@loopartners.com.sg