CS Professional · IFSCA - Regulations, Listing and Compliances · Overview of FinTech and Service Providers in IFSC
A global firm plans to test a new robo-advisory product in GIFT IFSC under a regulatory sandbox, with a limited set of customers and relaxed requirements for a fixed period, supervised by the regulator. Which statement about the sandbox concept is correct?
A sandbox lets innovators test products with real but limited customers in a controlled, time-bound environment under regulator monitoring and safeguards. It is not an unsupervised public offer, not limited to banks, and does not give a permanent licence.
- AThe sandbox permits unlimited public offering with no regulatory oversight
- BThe sandbox lets innovators test products live in a controlled environment, with safeguards and regulator monitoring, before wider launchCorrect
- CThe sandbox is available only to entities already licensed as banks
- DParticipation in a sandbox grants a permanent licence to operate
Explanation
A regulatory sandbox is a controlled, time-bound live testing framework with limited scope and safeguards, monitored by the regulator, allowing innovation while managing risk. It is not an unregulated offering, is not restricted to banks, and does not itself confer a permanent licence; a firm must seek authorisation to scale beyond the test.
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