CBUAE issues Sandbox Conditions Regulation to boost innovation in financial services sector

 

The Central Bank of the UAE (CBUAE) has recently introduced the Sandbox Conditions Regulation, aimed at fostering a conducive environment for startups and global fintech companies.

This move is designed to enhance creativity and innovation within the financial sector by providing a structured regulatory and supervisory framework. The regulation is also expected to bolster the financial sector’s competitiveness and contribute to the UAE’s economic expansion.

Regulatory Framework and Participant Conditions

The regulation sets out specific criteria that participants, including startups, fintech firms, and established businesses offering innovative financial services, must meet. It permits these entities to trial new business models, products, and services for a set period while adhering to ongoing regulatory requirements to safeguard the interests of all parties involved.

Enabling Proactive Supervision and Regulatory Compliance

These stipulations allow the CBUAE to proactively monitor and address innovations through its supervisory activities, assisting participants in aligning their operations with regulatory standards.

Application Requirements

To qualify, applicants must introduce a technologically innovative financial product, service, solution, or business model that could potentially benefit consumers and/or the broader industry. Participants are also expected to show an intention to expand the proposed service across the UAE after completing the sandbox program.

Promoting Innovation and Protecting Stakeholders

Khaled Mohamed Balama, Governor of the CBUAE, remarked that the release of the Sandbox Conditions Regulation underscores the UAE’s dedication to nurturing innovation and advancing a knowledge-based economy. The framework not only encourages experimentation and positive contributions to the economy but also prioritizes consumer protection and the interests of all stakeholders.

The regulation has been officially published in the Official Gazette and is now in effect.

Source: economymiddleeast.com

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