{"id":17206,"date":"2019-05-22T18:30:27","date_gmt":"2019-05-22T13:00:27","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=17206"},"modified":"2019-07-05T11:35:09","modified_gmt":"2019-07-05T06:05:09","slug":"sebi-and-irdai-regulatory-sandbox-regulations","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/sebi-and-irdai-regulatory-sandbox-regulations\/","title":{"rendered":"SEBI &#038; IRDAI Introduces Regulatory Innovative Sandbox Regulations"},"content":{"rendered":"<p>Financial sector regulators are taking a lot of initiatives to encourage startups in their segments by making data and systems available to them. Last month, RBI had announced administrative innovative sandbox regulations where startups could test out new financial products in real-time with limited regulations. Now, on Monday, i.e. 21<sup>st<\/sup> May 2019, insurance regulator IRDAI and stock <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a> regulator SEBI also announced similar kind of initiatives.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"515\" height=\"477\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-48.png\" alt=\"Innovative Sandbox Regulations\" class=\"wp-image-17209\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-48.png 515w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-48-300x278.png 300w\" sizes=\"(max-width: 515px) 100vw, 515px\"\/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Purpose of introducing Regulatory Sandbox\nRegulations<\/strong><\/h2>\n\n\n\n<p>The purpose of introducing Sandbox Regulations is to:<\/p>\n\n\n\n<ul><li>Provide financial technology firms and\nunregulated market participants with an environment to test their new solutions\nwith markets data. <\/li><li>The framework can be utilized by any entity that\nintends to innovate on the products, services, and solutions for the securities\nand commodities market in India. <\/li><li>The entities would have access to markets data\nbut not live data to test their solutions.<\/li><li>To create an ecosystem which promotes modernization\nin the securities market<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What is Innovation Sandbox?<\/strong><\/h2>\n\n\n\n<p>Innovation\nSandbox is a shared workspace to conceive, discover new subjects, expand\ntechnologies and share knowledge. It is a framework to share market data with\nfinancial technology firms to brainstorm and create innovative solutions for\ncapital markets. <\/p>\n\n\n\n<p>SEBI will allow <a href=\"https:\/\/enterslice.com\/learning\/category\/fintech\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Fintech (opens in a new tab)\">Fintech<\/a> firms which are not registered with it to be a part of the sandbox. Fintech firms meeting SEBI criteria will have access to anonymous, historical data from exchanges, depositories and mutual funds.&nbsp; <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Features and Structure of Innovation Sandbox Regulations<\/strong><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"580\" height=\"343\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-49.png\" alt=\"Structure of Innovation Sandbox \" class=\"wp-image-17210\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-49.png 580w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-49-300x177.png 300w\" sizes=\"(max-width: 580px) 100vw, 580px\"\/><\/figure><\/div>\n\n\n\n<p>Let us\ntry to discuss the above categories in detail now:<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Design Components:<\/strong><\/h2>\n\n\n\n<p>Design\nComponents includes Data Sets and Infrastructure. The most significant\ncomponents of an Innovation Sandbox is access to securities market-related\ndata, which will allow participant to test and improve their FinTech solution. The\ndatasets given to the market will be chronological and anonymized. Further, it will\ncontain data related to periodic market events. But, live data will not be made\naccessible to participants.<br>\n<br>\nAccess to such datasets will be provided in a phased manner, starting with a limited\namount of data and based on validations, more exhaustive data would be provided\nto participants. Such data sets will be shared through APIs (application\nprogram interface).&nbsp;<br>\nA steering&nbsp;committee comprising of market infrastructure institutions\n(MIIs) and qualified registrar and share transfer agents will develop the\noperating guidelines for the framework, and will also include members from Fintech\nstartups, academia, angel investors and the likes.&nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Legal Components:<\/strong><\/h2>\n\n\n\n<p>Some of\nthe legal components of Innovation Sandbox include:<\/p>\n\n\n\n<ul><li>Flexibility<\/li><li>Not-for-Profit<\/li><li>Compliance<\/li><li>Legally Robust<\/li><li>Intellectual <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Property&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Property refers to the legal designation of ownership over valuable items or assets held by an individual or a business. This ownership grants the holder certain legal rights to use, consume,(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/property\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Property<\/a> Rights (IPR) Protection<\/li><li>Prevention of Data Misuse<\/li><li>Restriction from Fraudulent Purposes<\/li><li>Secured<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Administrative Components:<\/strong><\/h2>\n\n\n\n<p>This\ncomponent includes:<\/p>\n\n\n\n<ul><li>Assessment of Application received for\nparticipating in the Innovation Sandbox, and further rule-based self-assessment\nprocess shall be formalized to allow the applicants automatic entry into\nInnovation Sandbox.<\/li><li>Secondly, a governance body shall be formed\nconstituting of representatives from Stock Exchanges, Depositories and\nQualified Registrar and Share Transfer Agents who will supervise the operations\nof the Innovation Sandbox for the benefit of its contributors, users and\nsecurities market. This governing body will ensure that the sandbox fulfils its\nstated objectives.<\/li><li>An operational team should be formed for day to\nday activities of the Innovation Sandbox.<\/li><li>Rules of participation shall be framed to\nregulate the rights and responsibilities of the participant for Innovation\nSandbox and other participants<\/li><li>A grievance redressal process shall be\nformulated to deal with grievances of any applicant in the Innovation Sandbox<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Interface for Innovation Sandbox<\/strong><\/h2>\n\n\n\n<p>The complete lifecycle of Innovation Sandbox shall be digital to ensure transparency and efficiency.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" loading=\"lazy\" width=\"628\" height=\"449\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-50.png\" alt=\"Sandbox Regulations\" class=\"wp-image-17211\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-50.png 628w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/image-50-300x214.png 300w\" sizes=\"(max-width: 628px) 100vw, 628px\"\/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Eligibility Criteria for inclusion into\nInnovation Sandbox<\/strong><\/h2>\n\n\n\n<ul><li>Any entity who wants to innovate on the\nproducts, services or solutions for the securities and commodities markets in\nIndia.<\/li><li>The applicant should have a authentic need for\ntesting the solution using the resources available in the Innovation Sandbox<\/li><li>The applicant should be able to claim that the\nsolution cannot be adequately developed without testing in the Innovation\nSandbox<\/li><li>The applicant should have the necessary capital to\nsupport testing in the sandbox<\/li><li>Applicant should be able to describe their post\ntesting strategy<\/li><li>The solution should have qualities that could offer\ndirect benefits to consumers, capital market and the Indian economy at large.<\/li><li>The applicant is required to present a cyber-security\ncompliance certificate as per SEBI&rsquo;s Cyber Security Guidelines.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Benefits\nof SEBI&rsquo;s Innovation Sandbox<\/strong><\/h2>\n\n\n\n<ul><li>Innovation Sandbox will help in showcasing the working prototype of the solution, which may help FinTech firms secure more funding.<\/li><li>It will help in assessing compliance and readiness with <a href=\"https:\/\/www.sebi.gov.in\/legal\/circulars\/may-2019\/framework-for-innovation-sandbox_43027.html\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"SEBI&rsquo;s regulations (opens in a new tab)\">SEBI&rsquo;s regulations<\/a>.<\/li><li>Developers can explore industry challenges and use cases for innovative technologies linked to the information of new solutions across the industry.<\/li><\/ul>\n\n\n\n<p>Also Read: <a href=\"https:\/\/enterslice.com\/learning\/rbi-releases-draft-framework-for-regulatory-sandbox\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"RBI Releases Draft Framework for Regulatory Sandbox to Create Innovation Test Lab for Fintech (opens in a new tab)\">RBI Releases Draft Framework for Regulatory Sandbox to Create Innovation Test Lab for Fintech<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Comments of IRDAI on Innovative Sandbox Regulations<\/strong><\/h2>\n\n\n\n<ul><li>IRDAI said that with this approach, Fintech&rsquo;s would\nhave a secure and favorable space to research and where the cost of failure can\nbe contained.<\/li><li>Further, IRDAI said that the sandbox would help\nto improve growth in the fintech space and increase the speed of new solutions\nare developed with help from the regulator and industry experts on meeting\nregulatory requirements and ensuring policyholder protection.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Our Take<\/strong><\/h2>\n\n\n\n<p>The Sandbox Regulations will help entities to test their innovations effectively before introducing them in a live environment and will further create an ecosystem which will promote innovations in the stock market. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Financial sector regulators are taking a lot of initiatives to encourage startups in their segments by making data and systems available to them. Last month, RBI had announced administrative innovative sandbox regulations where startups could test out new financial products in real-time with limited regulations. Now, on Monday, i.e. 21st May 2019, insurance regulator IRDAI [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":17251,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[1242,1991,377],"acf":{"service_id":"201"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>SEBI and IRDAI introduces Regulatory Innovative Sandbox Regulations<\/title>\n<meta name=\"description\" content=\"IRDAI and SEBI announced administrative innovative sandbox regulations where startups can test new financial products in real-time with limited regulations\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/sebi-and-irdai-regulatory-sandbox-regulations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"SEBI and IRDAI introduces Regulatory Innovative Sandbox Regulations\" \/>\n<meta property=\"og:description\" content=\"IRDAI and SEBI announced administrative innovative sandbox regulations where startups can test new financial products in real-time with limited regulations\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/sebi-and-irdai-regulatory-sandbox-regulations\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-05-22T13:00:27+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-07-05T06:05:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/SEBI-and-IRDAI-introduces-Regulatory-Sandbox-Regulations.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"685\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Neelansh Gupta","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/IMG_20190305_185223.jpg","authorDescription":"Mr. Neelansh Gupta is a Legal Counsel having extensive in-depth knowledge of various laws.  He has completed his graduation in law and has experience in IPR, Taxation and Corporate laws.","postViews":468,"readingTime":3,"nextPost":{"id":17373,"slug":"sebi-allows-mutual-fund-to-trade-commodity-derivatives"},"prevPost":{"id":17274,"slug":"impact-of-2019-elections-on-indian-economic-sector"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/05\/SEBI-and-IRDAI-introduces-Regulatory-Sandbox-Regulations.jpg","postTerms":"Latest News","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/17206"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=17206"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/17206\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/17251"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=17206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=17206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=17206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}