Revised Framework for Innovation Sandbox
Summary
SEBI issues a circular establishing a revised framework for an Innovation Sandbox to promote FinTech adoption in the securities market. The framework outlines eligibility criteria, operational stages, and governance structures involving a steering committee and enabling organizations. It details the provision of anonymized test data and infrastructure while clarifying intellectual property rights and administrative procedures.
Text
SEBI believes that encouraging adoption and usage of financial technology (‘FinTech’) would have a profound impact on the development of the securities market.
Startups including FinTech firms should have access to market related data, and test environments which are otherwise not readily available to them, to enable them to test their innovations effectively before the introduction of such innovations in a live environment.
Innovation Sandbox facilitates access to an environment (testing facilities and test data) provided by Enabling Organizations like Stock Exchanges, Depositories and Qualified Registrar and Share Transfer Agents (QRTAs) wherein innovators (hereinafter referred to as Sandbox Applicants) would be testing their innovations in isolation from the live market.
The steering committee shall supervise the operations of the Innovation sandbox. SEBI representative shall also be included as a member of this committee.
The steering committee shall process the applications submitted by sandbox applicants, approve / reject applications, assign a lead enabling organizations etc.
The secretariat for a particular application would be the assigned lead enabling organization.
The lead enabling organizations shall also be responsible for onboarding the applicant post approval of the application and monitoring the applicant throughout the lifecycle of the sandboxing.
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.
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.
During Stage – II, the cap on the utilization of resources shall be removed, subject to availability of resources at that point of time.
Applicant must be an Indian Citizen or entities registered in India. The Know Your Customers (KYC) norms must be in line with the Central Know Your Customers Registry (CKYCR) and KYC Registration Agency (KRA) KYC requirements comprising of following: Name, Directors/Partners, Address, Date of establishment, Contact details, Website, Govt Issued Identification Details, Letter of undertaking regarding blacklisting.
The applicant should have a genuine need for testing the solution using resources available in the Innovation Sandbox. The applicant should provide justification of requirement to access the test data and test environment and also inform what dataset is required.
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Source: SecMarx — Revised Framework for Innovation Sandbox. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.