FCA announces testing date for regulatory sandbox

The regulator first set out plans to expand Project Innovate by implementing a regulatory sandbox in November last year.

The sandbox aims to create a ‘safe space’ in which businesses can test innovative products, services, business models and delivery mechanisms in a live environment without immediately incurring all the normal regulatory consequences of engaging in the activity in question.

The FCA says that a sandbox could deliver a number of benefits to innovators, including reducing the time it takes for innovative ideas to come to market. The benefits to firms should lead to better outcomes for consumers, such as an increased range of products and services. The sandbox also enables the FCA to work with innovators to ensure that appropriate consumer protection safeguards are built in to their new products and services before these reach a mass market.

Firms that do not yet have FCA authorisation will also be able to make use of the sandbox. The FCA has suggested that these firms will be able to use a tailored authorisation process that will allow only for the testing of products and services.

The FCA says it is now finalising the design of the sandbox and will publish more information on how the sandbox will work on 11 April.

Christopher Woolard, director of strategy and competition at the FCA, said:

“To promote competition it is vital that we support firms – both regulated and unregulated, whether large incumbent or small start-ups – that want to bring new ideas that can benefit consumers to market. In just one year, Project Innovate has helped over 175 innovative businesses and undertaken a number of steps to address some of the challenges that firms face."