Wednesday, August 10, 2022
HomeEquityEntities from 'First Cohort' of SECP's Regulatory Sandbox complete testing

Entities from ‘First Cohort’ of SECP’s Regulatory Sandbox complete testing

February 24, 2022: Innovative business solutions, selected for live testing and experimentation in 'First Cohort' of SECP's Regulatory Sandbox, have successfully passed evaluation on the basis of mutually agreed test scenarios and expected outcomes.

The SECP, in its first cohort of Regulatory Sandbox, permitted six solutions for testing in a controlled environment subject to terms and conditions. The tests were focused on achieving clarity on whether such product/solution can operate in the existing regulatory framework or amendment or an altogether new amended regulatory framework is required.

The selected participants' tested solutions for Digital Peer-to-Peer (P2P) Lending Platform, Mutual Fund Digital Distribution and Robo Advisory, Digital Equity Crowdfunding Platform, Digital Insurance Brokerage and Digital General Takaful Provider. During the six months testing phase, the participants were in constant liaison with SECP and shared impediments, whether regulatory or otherwise, to their testing.

The participant testing Digital Peer-to-Peer (P2P) Lending Platform received an encouraging response both from lenders and borrowers. SECP is in process of amending the NBFC Regulations to provide a comprehensive enabling framework for P2P Lending. Under the proposed framework, an existing licensed NBFC would be able to operate a P2P Lending Platform subject to the regulatory requirements and obtaining prior permission from the SECP.

Similarly, the tests also paved the way for a framework of Mutual Fund Digital Distribution and Robo Advisory. SECP issued guidelines encouraging the use of FinTech for distribution and advisory purposes. Takeaways from testing also enabled SECP to develop Rules for micro and digital-only insurer. Post public consultation these Rules are currently in the final stages of approval.

It is emphasized here that the inclusion of a product/solution in the sandbox should not be construed to assume legitimacy for real-life commercial operations without express written approvals from SECP by entity or company.

In the meanwhile, the shortlisted participants of Cohort II of the Regulatory Box have entered the testing phase. The testing period varies from six to nine-month, depending on the solution being tested and the timeline allowed to the participants. SECP will also be inviting applications for participation in Cohort III in the next eight weeks.

Press Release

 

Posted on: 2022-02-24T23:26:49+05:00

31074

RELATED ARTICLES
- Advertisment -

Most Popular