NASSAU, BAHAMAS – The Central Bank is evaluating the feasibility of creating a Regulatory Sandbox to support entities that wish to introduce innovative fintech products, services, delivery channels, and technology platforms to potential customers and investors.
The regulator on Thursday announced that it had launched a 30-day consultation period on its Consultation Paper for a Regulatory Sandbox.
The Sandbox according to the regulator, will enable applicants to test their business models and objectives in a controlled environment, allowing the Central Bank to assess these models while ensuring appropriate safeguards are in place. To be accepted into the Sandbox, applicants must meet both general and specific eligibility criteria. Once approved, participants will be given specific terms and conditions under which they can test various aspects of their business plans within a set timeframe.
Throughout this process, the Central Bank will guide areas such as enterprise risk management, risk assessment, regulatory reporting requirements, third-party risk, consumer safety and protection, cybersecurity and data protection, network accessibility, and communication strategy. Additionally, the Central Bank will address relevant standards from its legislative and policy framework, including capital and solvency requirements, liquidity and reserves management, corporate governance, and outsourcing arrangements.
“By exploring the tenets of the Regulatory Sandbox as a supervisory tool, the Central Bank would be seeking to amend, establish, or develop the legislative and policy framework, authorization requirements, and bespoke supervisory provisions under which participating entities could be introduced to the regulatory environment. The Sandbox would also provide the Central Bank with the flexibility to test its ability to grant conditional regulatory exceptions as part of the application process to assess and evaluate the viability of an applicant’s business plan and its proposed impact on the financial services sector,” the regulator noted.
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