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Financial Conduct Authority unveils successful sandbox firms on the second anniversary of Project Innovate

The Financial Conduct Authority (FCA) yesterday marked the second anniversary of Project Innovate by announcing the firms that were successful in their applications to begin testing in the first cohort of the regulatory sandbox.

The regulatory sandbox is part of Project Innovate, an initiative kicked off in 2014 to provide innovators with support to navigate the regulatory system and promote competition in the interest of consumers.

The regulatory sandbox aims to create a ‘safe space’ in which businesses can test innovative products, services, business models and delivery mechanisms in a live environment while ensuring that consumers are appropriately protected.

Christopher Woolard, executive director of strategy and competition at the FCA, said:

“The FCA’s regulatory sandbox was a first for regulators worldwide and underlines our deep commitment to innovation and our willingness to think outside the usual regulatory parameters. We are pleased to announce the first cohort of firms.”

“It has been an intense process for both firms and ourselves and we are grateful for their cooperation and hard work in getting us all to this position. We look forward to these businesses bringing new products and services to market whilst we ensure that appropriate consumer protection safeguards are in place.”

Sandbox firms

The first cohort of the regulatory sandbox closed to applications on 8 July 2016. The FCA received applications from 69 firms from a diverse range of sectors, geographies and sizes. 24 applications were deemed to meet the sandbox eligibility criteria and were accepted to develop towards testing, including early stage start-ups, challengers and incumbent firms.

The current cohort consists of the firms listed below that we expect to begin testing shortly. Tests will be conducted on a short-term and small-scale basis. We have worked with the sandbox firms to agree testing parameters, building in consumer safeguards. In addition to the firms below, six firms were not ready to begin testing and will be part of cohort two.

Firm

Description

Billon

An e-money platform based on distributed ledger technology that facilitates the secure transfer and holding of funds using a phone based app.

BitX

A cross-border money transfer service powered by digital currencies / blockchain technology.

Blink Innovation Limited

An insurance product with an automated claims process, which allows travellers to instantly book a new ticket on their mobile device in the event of a flight cancellation.

Bud

An online platform and app which allows users to manage their financial products, with personalised insights, on a single dashboard. Bud's marketplace introduces relevant services which users can interact with through API integrations.

Citizens Advice

A semi-automated advice tool which allows debt advisers and clients to compare the key features of available debt solutions.

Epiphyte

A payments service provider that aims to provide cross-border payments using blockchain technology.

Govcoin Limited

A technology provider that has partnered with the Department for Work and Pensions (DWP) to determine the feasibility of making emergency payments using means other than cash or the Faster Payments Scheme. The payments platform will use blockchain to allow the DWP to credit value to a mobile device to transfer the value directly to a third party.

HSBC

An app developed in partnership with Pariti Technologies, a FinTech start-up, to help customers better manage their finances.

Issufy

A web-based software platform that streamlines the overall Initial Public Offering (IPO) distribution process for investors, issuing companies and their advisors.

Lloyds Banking Group

 An approach that aims to improve the experience for branch customers which is aligned with the online and over the phone experience.

Nextday Property Limited

An internet-based property company that will provide an interest free loan for a guaranteed amount to customers if they are unable to sell their property within 90 days.

Nivaura

 A platform that uses automation and blockchain for issuance and lifecycle management of private placement securities.

Otonomos

A platform that represents private companies’ shares electronically on the blockchain, enabling them to manage shareholdings, conduct bookbuilding online and facilitate transfers.

Oval

An app which helps users to build up savings by putting aside small amounts of money. These savings can then be used to pay off existing loans early. Oval will be working with Oakam, a consumer credit firm, and a number of their customers during the test period.

SETL

A smart-card enabled retail payment system based on their OpenCSD distributed ledger.

Tradle

An app and web-based service that creates personal or commercial identity and verifiable documents on a distributed ledger. In partnership with Aviva they will provide a system for automated customer authentication.

Tramonex

An e-money platform based on distributed ledger technology that facilitates the use of “smart contracts” to transfer donations to a charity.

Swave

A micro savings app that provides an across-account view; enables a round-up service every time a user spends money and calculates an affordable savings amount based on the user’s spending behaviour.

Application window for the second Sandbox cohort

Firms can apply to be part of our second sandbox cohort from 21 November 2016. The application period will close on 19 January 2017. The application form, instructions on how to apply and some lessons learnt from the first cohort are available on our website. The test design period for cohort two will take approximately 10 weeks and we would expect all accepted firms to be ready to begin testing in May 2017.

The FCA encourages applications from firms of all sizes. As seen by the firms accepted into the first cohort, the sandbox is available to large firms, start-ups and everything in between.

Notes to editors

  1. Find out more about Project Innovate.
  2. Christopher Woolard delivered a speech about Project Innovate and the sandbox on 22 September 2016.
  3. On 1 April 2013, the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
  4. The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
  5. Find out more information about the FCA.

 

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