October 2, 2020: The Securities and Exchange Commission of Pakistan (SECP) has granted approval to various innovative solutions for the commencement of live testing and experimentation under its technology-driven initiative – Regulatory Sandbox.
The first cohort under the Regulatory Sandbox Guidelines was announced in February 2020, which received immense response from a wide range of innovators including well-established entities, foreign companies and start-ups. Applicants submitted their proposed solutions and business models in regulated sectors of SECP i.e. Insurance Sector, Non-Banking Finance Sector, and Capital Markets.
The products and business models approved by the Commission for live testing include digital insurance, a digital platform for mutual funds, Roboadvisory and crowdfunding. Approved applicants will be allowed to operate in a controlled environment for a period of up to six months, in accordance with the conditions and limitations imposed on applicants. At the end of the testing period, applicants shall submit a comprehensive report to the Commission for sharing the overall results and statistics, which will then determine the future course of action for these innovations. This process will assist in bringing new and beneficial technology products for the end-users to the market.
SECP believes that testing of technology-driven solutions through Regulatory Sandbox can stimulate financial and technological innovation and broaden the range of financial products for increasing the financial inclusion in the country. Such initiative also supplements the SECP’s vision of enhancing financial inclusion and promotion of FinTech and InsurTech sectors in its regulated domain.
