Establishment of the Regulatory Sandbox
The Regulatory Sandbox Framework was published in October 2016 to enable the experimentation of fintech solutions in a live environment, subject to appropriate safeguards and regulatory requirements. The policy was issued following a public consultation of the policy’s exposure draft released in July 2016 which received feedback from various stakeholders including financial institutions, fintech companies, associations and other corporates.
Following the comments and suggestions received from the public, the eligibility criteria of the Sandbox was expanded to clarify the focus of innovations that the sandbox aims to support. Innovations should have clear potential to:
(i) improve the accessibility, efficiency, security and quality of financial services;
(ii) enhance the efficiency and effectiveness of Malaysian financial institutions’ management of risks; or
(iii) address gaps in or open up new opportunities for financing or investments in the Malaysian economy.
The minimum standards and requirements for participation in the sandbox were also reviewed to encourage wider participation of fintech companies. Applicants to the sandbox should be able to demonstrate that a product, service or solution has been developed to a functional stage and is ready for testing. The applicant must also have a good understanding of risks during testing, with adequate resources committed to effectively manage the risks.
For further information, please refer to the press release for the Sandbox Framework