SEBI Issues Revised Regulatory Sandbox Policy

On June 14, 2021, Securities and Exchange Board of India (SEBI) issued a circular on 'Revised Framework for Regulatory Sandbox' (Revised Sandbox Policy), revising the erstwhile framework issued by SEBI through circular dated June 05, 2020. A regulatory sandbox grants regulatory relaxations (ranging from registration fee to track record) for a period of one year, to financial institutions to enable them to experiment with fintech solutions on real customers in a live environment. After one year, the relaxations and limited registrations granted by SEBI are withdrawn. The key highlights of the Revised Sandbox Policy are discussed hereunder.

Division of sandbox testing

The Revised Sandbox Policy bifurcates testing of the applicants' proposed solutions into two stages, cumulatively not exceeding a twelve-month period, unless extended. During stage-I, applicants would be utilizing limited and identified set of users, while during stage-II, testing would be extended to