A Growing Trend in Financial Regulation: Thematic Sandboxes

28 February, 2019

Original Source: CGAP

In 2016, the UK Financial Conduct Authority (FCA) pioneered the concept of a market-driven regulatory sandbox with cohorts selected from a general pool of aspiring innovators. Reminiscent of private-sector incubators or accelerators, the FCA’s sandbox model had immediate intuitive appeal for regulators and fintech innovators seeking common ground. Scan the globe today and you will find that most of the active regulatory sandbox programs follow a similar approach. In the past year, however, "thematic sandboxes" have emerged as an important refinement to this model.

Unlike general purpose sandboxes, thematic sandboxes are designed to advance more focused policy objectives – typically, by limiting admission to firms that are developing specific types of technologies, products or business models. Over the past 18 months, CGAP has seen thematic sandboxes emerge in three distinct categories:

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