The Securities and Exchange Board of India (Sebi) has published a framework for an innovation sandbox which would enable non-regulated firms to tap market data feeds to test new product ideas.
The initiative is being put forward as a means to capitalise on fintech innovation within India's capital markets environment.
In a statement laying out its plans, the regulatory body says: "Sebi believes that en encouraging adoption and usage of financial technology would a have a profound impact on the development of the securities markets. Fintech can act as a catalyst to further develop and maintain an efficient, fair and transparent securities market ecosystem."
It is envisaged that participants in the sandbox would have access to a drip-feed of anonymised and historical depositories data (holding data, KYC data), stock exchange data (transactions data like order log, trade log) and mutual funds transactions data.
Under the proposals, a governance body, comprising representatives from stock exchanges, depositories and qualified registrar and share transfer agents should be formed to supervise the operations of Innovation Sandbox. An operational team would also need to be funded to oversee day-to-day activities, including the processing of applications, communications and supervision of the testing.
For the implementation of operating guidelines, Sebi has asked entities to constitute a steering committee with membership drawn from market infrastructures and registrars.