ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has introduced the concept of Regulatory Sandbox, which provides a tailored regulatory environment to conduct limited-scale live tests of innovative products, services and business models under the regulator’s oversight.

SECP officials told media here on Tuesday at the SECP Headquarters that the SECP had launched the second cohort of its Regulatory Sandbox. The Regulatory Sandbox is a tailored regulatory environment that allows entities/firms to conduct limited scale live tests of innovative products, services, processes, and business models in a controlled environment.

In the second cohort of Regulatory Sandbox, preference would be given to innovation in the areas of digital assets/Security Token Offerings (STOs), non-bank financial companies, blockchain/distributed ledger solutions for capital markets, digital identity/AML/KYC, AI, machine learning and robotic processes automation-based solutions.

Officials said that the Commission has instituted various reforms to develop a comprehensive and coherent industry policy to share regulatory thinking and promote a conducive FinTech environment in Pakistan, and the regulatory sandbox initiative is part of this agenda.

Under second cohort, the application window will be open from April 15, 2021 till May 14, 2021 for all eligible persons including registered companies, unregistered startups and FinTech firms.

The unregistered entities would have to get registered upon successful experiment. The application form, eligibility criteria and related documents are provided in the Regulatory Sandbox Guidelines placed at SECP’s website.

The Commission has formed a six-member committee, headed by Chairman SECP to evaluate the applications. All the applications will undergo preliminary screening and detailed evaluation. Successful applicants will be allowed to test and experiment their innovative ideas and solutions for a period of six months. Upon completion of experimentation period, the entities registered in Sandbox will submit detailed completion report to SECP, following which future course of action for the tested solutions will be determined.—SOHAIL SARFRAZ