If you want to apply to be part of the regulatory sandbox you should understand how your proposal meets our eligibility criteria and read about what we’ve learned from previous sandbox cohorts.
In the Regulatory Sandbox application form you have to explain your proposition and how it meets our eligibility 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
Innovation does not appear to be intended for use in the UK
|Genuine innovation||Is your innovation ground-breaking 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 consumer directly or indirectly
The business has identified any possible consumer risks and proposed mitigation
The innovation will promote effective competition
Likely detrimental impact on consumers, markets or the financial system
It looks designed to circumvent regulations
|Need for a sandbox||Do you have a genuine need to test the innovation in our sandbox?||
The innovation does not easily fit the existing regulatory framework, making it difficult or costly to get the innovation to market
There is a clear need for a sandbox tool to test in a live environment
The business has 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 the firm wants answered (to achieve the testing objective)
The firm is able to undertake the test easily without the support of the FCA
A dedicated supervisor or our Direct Support team 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
The firm has the resources to test in the sandbox
The firm has sufficient safeguards in place to protect consumers and is 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
The firm does not have the resources for the test
The proposed customer safeguards are inadequate and/or appropriate redress cannot be provided by the firm
What we’ve learned from previous applications
Firms applying to the sandbox should consider the following points that we’ve learned from previous sandbox cohorts.
Ready for testing
Accurately demonstrating your readiness for testing is a particularly important part of your application.
If we don’t think your firm is ready to test or has considered the points outlined in the matrix above, then your application is unlikely to be successful.
We are particularly interested in:
- the stage of development your idea is in and whether it can be tested in a live environment (including if you have done any functional testing)
- your specific testing objectives and testing plan
- the major dependencies for you to begin testing and how you intend to fulfil these (eg securing contractual agreement with a partner, securing a UK bank account, finalising development of your product)
Read our default standards for sandbox testing before you apply.
A number of the firms require a partner in order to test their proposition (eg a firm you can be an outsourced technology provider for).
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 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 – contact us and Prudential Regulation Authority's joint New Bank Start-up Unit.
Apply for Regulatory Sandbox
The application window for cohort 3 is now closed.
If you have any questions about the sandbox or want to discuss it before you apply, email [email protected] or call 020 7066 4488 and someone will be able to help you.