On 5 December, the UK Financial Conduct Authority (FCA) announced the firms that were successful in their applications to begin testing in the third cohort of the FCA’s regulatory sandbox. The sandbox allows firms to test innovative products, services or business models in a live market environment. The sandbox was a first for regulators worldwide. Since it opened, the sandbox has supported almost 70 firms in testing innovative products and services. The FCA is seeing more applicants from outside London and a broader range of firms. The FCA has also opened the application window for its fourth sandbox cohort.
The FCA received 61 submissions for the third phase. 18 applications met the sandbox eligibility criteria and were accepted to develop towards testing. Accepted propositions cover a range of areas including blockchain based payment services, money transfer, P2P investment aggregation, RegTech propositions, general insurance, Anti-Money Laundering (AML) controls, and biometric digital ID and Know Your Customer (KYC) verification. A full list is here. Over 40% of firms invited to test in cohort three are based outside London, compared to 35% in cohort two and 25% in cohort one.
Firms have until 31 January 2018 to submit their applications for cohort four. The eligibility criteria, application form and instructions on how to apply are available here. The FCA would expect all accepted firms to be ready to begin testing from June 2018.