Sandbox Frameworks

The latest available data indicates that up till the end of 2020, fifty seven (57) countries have implemented regulatory sandboxes and most of such sandboxes have been implemented either by regulators in the banking, insurance or the securities sectors for the advancement of financial technology (fintech).4 Regulatory sandbox frameworks across the world have few common characteristics that can even be referred to as the defining characteristics of a regulatory sandbox. These common characteristics include entry and eligibility requirements formulated by sectoral regulators that help in shortlisting and admitting eligible innovators in the framework, insurance requirements to be fulfilled by the innovator companies participating in the framework, consumer protection and redressal mechanism for solving grievances of consumers who have faced damage on account of the live testing being carried under the sandbox framework and the prescription of cohorts and stages of the implementation of the regulatory sandbox framework, all of which are executed on a case- by- case basis depending on the objectives and goals of the regulatory sandbox.

Understanding the Functional Aspects of Regulatory Sandbox Frameworks

Before moving forward, it is necessary to understand the various functional aspects of regulatory sandbox frameworks. To start with, it is necessary to discuss the steps involved in executing a regulatory sandbox framework. On an analysis of several regulatory sandbox frameworks, it was discovered that there are four (4) stages which have remained constant in regulatory

and-counting-what-weve-learned-regulatory-sandboxes> accessed 19 February 2022. 4 World Bank Group, ‘Global Experiences from Regulatory Sandboxes’ (2020) 8 Finance, Competitiveness & Innovation Global Practice <https://openknowledge.worldbank.org/bitstream/handle/10986/34 789/Global-Experiences-from-RegulatorySandboxes.pdf?sequence=5> accessed 19 February 2022.