SEBI to Launch Innovation Sandbox for Fintech Entities

IndraStra Global

SEBI to Launch Innovation Sandbox for Fintech Entities

By IndraStra Global News Team

SEBI to Launch Innovation Sandbox for Fintech Entities

Image Attribute: The Securities and Exchange Board of India (SEBI) building in Mumbai, India

On May 20, 2019, India's regulator for the securities market – Securities and Exchange Board of India (SEBI) proposed a framework – "Innovation Sandbox"; a test bench where fintech firms can experiment innovations in a closed environment. 

The so-called "Innovation Sandbox" will be governed by a body comprising of representatives from the bourses, depositories and qualified registrar and share transfer agents.

The regulator said in a circular, "SEBI feels that fintech firms should have access to market-related data, particularly, trading and holding data, which is otherwise not readily available to them." 

The circular further adds, "Conceptually, the innovation sandbox framework is applicable to any entity, who intends to innovate on the products, services, and/or solutions for the securities and commodities market in India"

This (framework) will enable entities (those who are accessing the sandbox) to test their innovations effectively before the introduction of such innovations in a live environment, to further create an ecosystem which promotes innovation in the securities market. The data that would be made available to the participating entities to test and improve their fintech solutions includes; depositories data (holding data, Know Your Customer-KYC data), stock exchange data (transactions data like order log, trade log), and mutual funds transactions data.

Kindly, do note: the datasets provided by the SEBI to the entities via "Innovation Sandbox" will be historical and anonymized, and will also contain data related to episodic market events. "Live Data" will not be made available to participants, SEBI said. 

The use of datasets would be governed by a comprehensive confidentiality agreement clearly specifying that the datasets should not be sold or shared in any manner with any other entity.