Securities Sandbox - a first from UK regulators

The Digital Securities Sandbox, set up by Bank of England and Financial Conduct Authority of the UK, can be a gamechanger in the securities market domain:

The UK's financial regulators, the Bank of England and the Financial Conduct Authority, have recently launched Digital Securities Sandbox, or DSS, a service designed to support a firm's innovations and ideas around digital assets and devise ways to apply them within the traditional financial services.

Both the Bank of England and the FCA had initiated a long consultation process before the formal launch of the sandbox, which is also intended to provide a platform for testing legislative changes around digital securities and how they may affect the market. The 2 entities said firms working in the financial services market can participate in the sandbox. They also said the sandbox will allow participants to use developing technologies, like DLT, to undertake the activities traditionally associated with Central Securities Depositories and trading venues.

3 FOCUS AREAS

The 3 focus areas for the sandbox will be facilitating innovation to promote a safe, sustainable, and efficient financial system, protecting financial stability, and protecting market integrity and cleanliness.

The sandbox is intended as a temporary supervisory regime facilitating fintech firms to carry out specific activities within certain parameters and determine whether these activities can be incorporated into the current regulatory regime.