FCA provides details on Regulatory Sandbox at Global Innovate Finance conference

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Christopher Woolard, Director of Strategy and Competition at the FCA gave a speech at the Global Innovate Finance conference 11 April 2016, whereby he outlined details on the regulatory ‘sandbox’ which they are due to launch:

  • FCA will only take on a few firms into the ‘sandbox’. They will need to be innovative and the benefits to the consumer will be need to be made clear.
  • FCA will not be able to disapply UK statute nor EU law in relation to the firm. This means if a company is broking blockchain based securities they will be conducting a regulated activity under FSMA and under EU law MIFID and will need to be authorised by FCA.
  • However, the FCA will have the power to disapply their own regulations (for example, the Business Standards in the FCA Handbook) if needs be. Also, in certain circumstances, they may offer a ‘no-action letter’ to the firm so that the firm has the reassurance that they will not be prosecuted.
  • The FCA will set out the requirements applicable to each sandbox firm. Of importance will be treating consumers fairly and acting honestly.