Come Play In The Sandbox: BSP Invites Innovations Through Regulatory Sandbox Framework

• Law Firm: SyCip Salazar Hernandez & Gatmaitan
• Subject Matter: Finance and Banking, Technology, Financial Services, New Technology
• Author: -1 SyCip Salazar Hernandez & Gatmaitan
• Published date: 23 May 2023

On September 5, 2022, the BSP issued BSP Circular No. 1153, series of 2022, entitled "Regulatory Sandbox Framework" (Sandbox Circular) which institutionalizes the Test & Learn (T&L) approach that the BSP has been implementing for BSFIs, third-party service providers of BSFIs, and new players seeking to offer financial products and services using new technology and innovations.

All BSFIs, BSFI Third-party service providers, and new players interested in entering the Philippine banking industry that intend to offer or use an emerging or new technology to deliver financial products or services pertaining to activities that could fall under the regulatory coverage of the BSP are encouraged to participate in the BSP Regulatory Sandbox.

Key provisions

• Regulatory Sandbox. "Regulatory Sandbox" is defined as a controlled, time-bound, live testing environment which may feature regulatory waivers at the regulator's discretion. The testing environment may involve limits of parameters within which Participants must operate. In the Regulatory Sandbox, Participants are allowed to explore the potential of their new technologies and products without posing excessive financial risks to the consumers.
• Eligibility Criteria. The Sandbox Circular provides eligibility criteria both for the prospect financial solution and the applicant. The financial solution must use new or emerging technology or utilize an existing technology in an innovative manner or ridges a market gap in the delivery of financial products/services.
• Conditions....