The regulatory sandbox allows businesses to test innovative propositions in the market with real consumers.
We're committed to supporting innovation within financial services and we continue to support innovative firms that wish to deliver consumer benefit and test their propositions in the market with real consumers.
The regulatory sandbox is open to all types of propositions and we welcome applications from all sectors of the financial services market. We're particularly interested in firms that want to help people, and the financial systems they rely on, deal with the effects of coronavirus (Covid-19).
We're taking steps to accelerate the pace of meaningful change in diversity and inclusion in the financial services sector. We encourage firms led by underrepresented groups to apply to the sandbox, and also welcome applications from firms that are looking to address issues of diversity and inclusion in financial services.
Find out about the 13 firms we accepted into cohort 7.
Always open regulatory sandbox
From August 2021, the regulatory sandbox is always open. This means we're now accepting applications on a rolling basis throughout the year. Read more about the sandbox.
The propositions must be genuinely innovative, show clear consumer benefit and meet all our eligibility criteria.
How to apply
Please complete the application form, so we can understand your business and the sandbox test you are proposing.
The application form includes space for you to explain how your proposition meets our eligibility criteria. The table below includes information on each of the criteria:
|Criteria||Key questions||Positive indicators||Negative indicators|
|In scope||Are you looking to deliver innovation that is either regulated business or supports regulated business in the UK financial services market?||
Innovation appears to be intended for the UK market
The relevant activity is regulated by the FCA, or may be used by FCA-regulated firms
Innovation does not appear to be intended for use in the UK
|Genuine innovation||Is your innovation new or a significantly different offering in the marketplace?||
Desk research produces few or no comparable offerings already established on the market
Step-change in scale
There are numerous examples of similar offerings already established on the market
It looks like artificial product differentiation
|Consumer benefit||Does the innovation offer a good prospect of identifiable benefit to consumers (either directly or via heightened competition)?||
The innovation is likely to lead to a better deal for consumers directly or indirectly
You have identified any possible consumer risks and proposed mitigation
The innovation will promote effective competition
You address issues of diversity and inclusion, and/or meet the needs of underserved consumers
Likely detrimental impact on consumers, markets or the financial system
It looks designed to circumvent regulations
It is targeted at consumers that are currently well served by existing offerings
|Need for a sandbox||Do you have a genuine need to test the innovation in our sandbox? Applicants aren't required to need a sandbox tool to meet this criteria||
The innovation does not easily fit the existing regulatory framework, making it difficult or costly to get the innovation to market
You will benefit from using a sandbox tool to test in a live environment
You have no alternative means of engaging with the FCA or achieving the testing objective
The full authorisation process would be too costly/difficult for a short viability test
Live testing is not necessary to answer the question that you want answered (to achieve the testing objective)
You're able to undertake the test easily without the support of the FCA
A dedicated supervisor, our Direct Support team, or a compliance consultant could answer the query
|Ready for testing||Are you ready to test the innovation in the real market with real consumers?||
You have a well-developed testing plan with clear objectives, parameters and success criteria
Some testing has been conducted to date
You have the resources to test in the sandbox
You have sufficient safeguards in place to protect consumers and are able to provide appropriate redress if required
Unclear objectives for testing and/or plans for testing are underdeveloped
Little to no testing has been done
You do not have the resources for the test
The proposed customer safeguards are inadequate and/or appropriate redress cannot be provided
A number of sandbox firms require a partner in order to test their proposition (eg you are a technology provider for a regulated firm).
If you need a partner, you must find and secure contractual agreements before testing.
We are not able to provide a partner if you need one.
Requirement to have a significant UK presence
If your test requires you to be authorised or registered by us, you would be required to have a certain level of staff presence and a head office located in the UK.
Many firms need a UK bank account to be able to carry out testing.
Regulated activities and restricted authorisation
If you require a restricted authorisation, you will need to submit a number of forms as part of your application.
We will guide you through the process of authorisation, however we recommend you read our authorisation pages to familiarise yourself with the process and the documentation that will be required.
Some key documents to read are:
- PERG 2.7 in our Handbook provides a broad outline of the activities the FCA regulates – you will need to work out which regulated activities you may be carrying out during your sandbox test
- our Threshold Conditions, which firms must meet to be authorised
- our guides to applying to be a payment institution and applying to be an electronic money institution (pay particular attention to the safeguarding requirements)
This restricted authorisation option is not available to firms looking for a banking license – or an insurer license - contact us and Prudential Regulation Authority's joint New Bank Start-up Unit or New Insurer Start-up Unit.