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.