In light of the existing framework for innovation sandbox (as discussed in the trail) and in order to further boost the development of the securities market and usage of financial technology (FinTech) companies, the Securities and Exchange Board of India (SEBI) has, through a Circular dated 2nd February 2021, issued a revised framework for innovation sandbox.
Accordingly, SEBI has revised objective of Innovation Sandbox To promote innovation both in terms of new products and services as well as new ways of delivering existing products and services so as:
• To Create new opportunities in the securities market
• To make existing services more efficient / investor friendly/ inclusive.
This would be achieved by giving access to both test data and test environment to Financial Institutions, FinTech firms, startups including entities not regulated by SEBI including individuals.
Also, the SEBI has listed out the Stages of Innovation sandbox:
Stage – I: During Stage – I, limited access to the test environment shall be provided and there shall be cap on the utilization of resources in terms of processing power, memory, storage etc.
Stage – II: During Stage – II, the cap on the utilization of resources shall be removed, subject to availability of resources at that point of time.
Apart from these, SEBI has prescribed the eligibility criteria for both the stages.
Source: Securities and Exchange Board of India
