Several regulators have introduced variants of the regulatory sandbox over the past year. In fact, I would say the sandbox is itself an experiment for regulators. There is much we can learn by sharing experiences and lessons from our different approaches. And ASIC is one regulator that we admire and watch closely on this front. Ta k e registration requirements. Most sandboxes require applicants to register prior to experimentation. The UK FCA has two fixed cohorts of applicants a year, while the MAS sandbox is always open for application. ASIC has an interesting approach. It has a class-exemption for firms testing a specific set of services for 12 months and up to 100 clients. Interested firms are required to notify ASIC before commencing business, provided they also meet certain consumer protection conditions. MAS opted for an application-based approach because we wanted to closely engage each applicant, understand the innovation, business model, and risks so as to customise the sandbox conditions. But each application is turning out to be quite time-consuming and we are mindful that our process does not get in the way of speed-to-market. So, we are keen to study ASIC’s experience with the class-exemption approach and see how our own approach can be improved. There are also interesting differences in the qualifying entities. HKMA’s sandbox is restricted to authorised institutions, while ASIC’s sandbox is restricted to FinTech start-ups. The MAS and UK FCA are open to both regulated entities and FinTech start-ups.
It is expected to begin operations soon. Conclusion Let me conclude. Financial regulation remains work-in-progress. We must press on with the reform agenda and see it through to full, timely, and consistent implementation. At the same time, we must evaluate the effects of the reforms put in place and make adjustments where appropriate, to maximise their effectiveness and minimise their costs. We must strengthen the foundations for sound risk management and good conduct by working with the industry to embed deeply a culture of responsible risk-taking and ethical conduct. 6/7  BIS central bankers' speeches  We must prepare our regulatory and supervisory frameworks for the technological changes sweeping the industry - addressing new risks while promoting innovation, harnessing the benefits of technology, and promoting growth and opportunity in our societies. Thank you. 7/7  BIS central bankers' speeches