• The Philippines Securities and Exchange Commission (SEC) has released a draft proposal for a Regulatory Sandbox Framework to encourage technological innovation in the financial services sector.
• The Commission is inviting public comments until October 10, 2023.
• The regulatory sandbox provides a controlled space for innovators to test their products with regulatory oversight, allowing waivers or modifications to specific requirements.

The Securities and Exchange Commission (SEC) has published a draft proposal for a Regulatory Sandbox Framework to promote technological innovation in the financial services industry. The SEC is inviting public comments on the draft proposal until October 10, 2023.

SEC Requests Comments

The draft acknowledges the SEC’s recognition of the significance of technological innovation in enhancing financial services, risk management, and the quality of life for Filipinos. It seeks to establish a regulated environment for the “Exploration, Experimentation, and Examination of Business-Oriented Technologies.”

“The sandbox will serve as a space where innovators can test their products in real-world scenarios but under a regulatory oversight.”

Atty. Paolo Montano M. Ong, PhiliFintech Innovation Office, SEC

The PIO was established in 2021 to regulate the use of financial technology (fintech) in the country. Its mission is to enhance consumer and investor protection while promoting financial inclusion, integrity, and stability. The office will now also have oversight of the comments for the Regulatory Sandbox Framework.

The draft states that the framework is set to promote innovation in technology and business models as it aims to facilitate the exploration and experimentation of business-oriented technologies while maintaining regulatory oversight. 

It also seeks to enhance efficiency, manage risks, and improve the lives of Filipinos by fostering a dynamic innovation ecosystem; whereas the sandbox allows participants to test innovative products or services within a controlled environment, with waivers or modifications to specific regulatory requirements. It also outlines evaluation criteria, application processes, and safeguards for participants.

Moreover, the graduates from the sandbox may transition to offering their products or services to the public with proper licensing. The draft emphasizes compliance with existing laws and regulations and retains the SEC’s authority to enforce regulatory requirements. 

How can the public send their opinions?

Feedback on the draft should be addressed to Atty. Paolo Montano M. Ong, 15th Floor, PhiliFintech Innovation Office (SEC), the SEC Headquarters, 7907 Makati Avenue, Salcedo Village, Barangay Bel-Air, Makati City, 1209, Metro Manila.

Those wishing to provide comments digitally can also send their input via email to [email protected] by no later than October 10, 2023.

What is the SEC regulatory sandbox?

The regulatory sandbox is designed as a controlled environment where businesses can test innovative financial products and services while ensuring investor protection.

This framework allows the SEC to waive or modify specific legal and regulatory requirements for each participant, depending on the risk associated with their activities.

The sandbox also aims to facilitate cooperation among regulators, innovators, and other stakeholders, backed by actual data to refine regulations and policies related to emerging technologies.

How to participate in the SEC Sandbox?

Entities looking to participate in the sandbox must be registered with the SEC and intend to apply technology innovatively to provide financial products or services.

A dedicated “Sandbox Committee,” led by the PhiliFintech Innovation Office, will administer the conduct of the regulatory sandbox.

The SEC may even allow the inclusion of “disinterested industry experts” to be part of this committee.

This article is published on BitPinas: SEC Seeks Public Input on Regulatory Sandbox Framework

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• Source: https://bitpinas.com/regulation/sec-seeks-public-input-emerging-tech/