The Monetary Authority of Singapore (MAS) launched Sandbox Express on 7 August 2019 to complement the FinTech Regulatory Sandbox established in 2016 (Original Sandbox). Sandbox Express aims to enable enterprising firms conducting certain MAS-regulated activities with a quicker option to begin experiments to bring innovative financial services or products to the market.
Sandbox Express is designed for low risk financial services or products which are well understood by the market and can be reasonably contained by pre-determined and standardised sandbox constructs. MAS currently offers Sandbox Express to insurance brokers, recognised market operators, and remittance businesses.
MAS aims to assess and respond to an applicant within 21 days after receiving a complete application. The assessment focuses on whether the applicant’s key stakeholders are fit and proper and whether there are technologically innovative qualities and benefits associated with the proposed service or product. Depending on the outcome of the assessment, MAS will either:
(a) authorise the applicant to begin market testing experiments under Sandbox Express constructs for an approved period of up to 9 months; or
(b) consider the application under the Original Sandbox if the proposal is deemed to be complex and time-consuming for Sandbox Express.
MAS hopes to use the approved testing period to understand and address the applicant’s potential regulatory challenges and to provide the applicant with more time to overcome business and technical challenges discovered during experimentation. In this regard, MAS will require progress appraisals to enable necessary actions to be taken in a timely manner.
In applying to enter Sandbox Express, applicants agree to be bound by the Sandbox Express constructs that MAS imposes on the applicant. Thus, interested applicants should fully understand the objective and principles of Sandbox Express before submitting a Sandbox Express application.
Under the Sandbox Express Guidelines, MAS has imposed requirements on applicants to:
(a) declare and undertake full compliance with conditions of licence approvals or exemptions;
(b) provide clear, complete and proper disclosure before on-boarding any customer and obtain a written acknowledgement of the disclosure;
(c) submit progress reports every 2 months and a final report at the end of the approved period;
(d) commit to meet certain operational expectations that MAS deems necessary; and
(e) comply with any other requirements MAS deems necessary.
MAS has emphasised that, as for the Original Sandbox, the Sandbox Express is not intended and cannot be used to circumvent applicable legal and regulatory requirements. A precautionary approach is taken by MAS to prevent potential exploitation of the Sandbox Express, imposing safeguard measures such as disregarding the following types of applications:
(a) concurrent or separate applications by the same applicant unless the proposals are materially different; or
(b) repeat applications within 3 months of a rejection by MAS (i.e., cooling-off period) to encourage applicants to conduct more comprehensive due diligence, improve its value proposition or submit a complete application.
MAS will closely monitor the use of Sandbox Express to ensure the evolving needs and interests of the financial industry are met and will explore the expansion of the range of financial products and services that may be offered through Sandbox Express.