Jul 18 – No free lunch here

The FCA announced its fourth cohort of firms who have been approved to enjoy the benefits of their sandbox.  The regulatory sandbox allows firms to test innovative products, services or business models in a live market environment, while ensuring that appropriate protections are in place.  It is part of Innovate, an initiative kicked off in 2014 to promote competition in the interest of consumers.  Since its inception Innovate has had over 1200 applications and has supported more than 500 firms.  The FCA received 69 applications to cohort four of the regulatory sandbox, an increase on the number of applications to cohort three.  29 firms will proceed to test.

The FCA is taking a broad and enlightened approach to its competition objective and is widely recognised as a world leader in this field.  It allows both regulated firms and new unregulated aspiring entrants to work with the regulator to develop new solutions.  Many of these will compete with existing approaches and firms.

AMI is supportive of this apart from one core aspect – that it is free.  Effectively free regulatory consultancy.  Except it is not free – all existing firms pay their fees which are allocated for this project.  They pay to allow competitors access to build new models which could propel them out of business.  This sandbox should have a price levied on all users and if not, then more independent scrutiny over who has access to the prize.

Robert Sinclair
July 2018