The Securities & Exchange Commission of Pakistan (SECP) has restructured its Regulatory Sandbox (RSB) to an open status system, allowing applicants, including fintech and startups, to apply year-round.
The sandbox applications will be received in three streams: Islamic finance, conventional finance, and women’s-specific trades. SECP has developed a comprehensive, self-explanatory application format and diagnostic tool to facilitate applicants. The restructuring aims to broaden outreach and ensure continuity in partnerships by allowing applicants to approach the RSB at the right point in their development lifecycle. SECP believes the RSB can stimulate financial and technological innovation in the financial services market.
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The restructuring of the sandbox was deemed necessary to reflect its maturity and incorporate lessons learned from over three years of operation. This shift to an always-open status will enable applicants to test the suitability of their proposed models through a diagnostic tool, build an application based on a self-explanatory format, and submit it at any time to a dedicated email. After a comprehensive evaluation, successful applicants will be allowed to test their solutions for six to nine months in a controlled environment, subject to SECP’s terms and conditions.
The Regulatory Sandbox project was launched in 2019 and is now in its fourth year of operations. SECP has received significant interest from a wide range of innovators, including established entities, foreign companies, startups, and fintech firms. To date, 128 applications have been received across the four cohorts announced. The most recent Cohort IV accepted applications in May-June of this year, with 11 out of 26 applicants being granted the opportunity to test their solutions starting from December 2023.
SECP has also published the RSB Position Paper 2023 on its website, sharing experiences and learnings from the Regulatory Sandbox project for the benefit of potential participants. The paper includes insights into the journey of second cohort participants, details of their testing methodology, performance, and learning outcomes. SECP aims to stimulate financial and technological innovation by providing a platform for testing technology-driven solutions in a controlled environment through the RSB.