The regulatory sandbox will be available from 1 January 2017. Innovative businesses may apply to their relevant regulator in each phase of development. Applications are treated confidentially. The regulatory sandbox will not involve any extra charges. Regular costs for authorisation and continuous supervision however do apply.
Partial authorisation
In addition to the regulatory sandbox, the regulators offer innovative businesses the possibility to apply for partial authorisation. Partial authorisation may be issued when a financial institution does not wish to engage in all operations governed by a full authorisation or is not yet able to meet all eligibility requirements for such an authorisation. Partial authorisation may be granted on a temporary basis but may also have a more permanent nature. As such, partial authorisation may be used by businesses to develop a full-fledged financial institution step by step.
Impact of the regulatory sandbox and partial authorisation
We believe the regulatory sandbox and possibility of issuing partial authorisation will support innovation in the financial services sector. The power of the regulatory sandbox lies in its specificity. Applications for the regulatory sandbox are confidential and the tailor-made solutions are by definition individual. The tailor-made solutions will therefore not set precedent and do not constitute universally binding policies. As a result, we expect the regulators to be readily approachable and have a positive and constructive attitude towards innovation. In addition, the discussion on the underlying purpose of financial markets regulation is likely to drive the efficiency of financial supervision.
De Brauw can help
To ensure an efficient and effective process, the financial institution must have a well prepared plan and have already analysed whether or not its innovative product or innovative business process constitutes a regulated service. With our experience working with the InnovationHub of DNB and the AFM, we can assist you in preparing the analysis and in the ongoing discussions with DNB or the AFM. Please contact us if you want to discuss whether your idea may be eligible for a tailor-made solution.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
