The UK's Financial Conduct Authority says that it will start working with partners in Europe, the Far East and the US on a blueprint for a global regulatory fintech sandbox.
Having launched the world's first domestic regulatory sandbox in 2016, the FCA last month floated the possibility of a global version, enabling fintech firms to carry out tests in different countries at the same time and helping watchdogs to identify and solve common cross-border problems.
Chris Woolard, executive director of strategy and competition at the FCA says that feedback on the proposal from other regulators, startups, large firms and trade bodies have come in, with particular interest in the idea of cross-border testing.
On how a global sandbox might work in practice, suggestions ranged from a ‘global dictionary’ which covers data needs across different countries to a joint mission statement from participating regulators. As for oversight, the idea of a consortium of representatives from participating regulators has proved popular.
Woolard concedes that the creation of global standards is unrealistic, declaring in a speech that: "The logic is clearly there, but my strong suspicion is that it would take twenty years to negotiate and in a fast-moving market would be nineteen years and six months out of date when we got there."
Instead, he urges work through international bodies such as Iosco, and calls for flexibility to enable regulators to experiment, as well as freedom for some watchdogs to opt in and out of different tests.
Details will now be firmed up, with regulators from Europe, America and the Far East meeting this week to begin work on a blueprint, showing, says Woolard, that "there’s real momentum behind this and we hope that before long the ambition of a global sandbox will be a reality".