Regulatory sandboxes allow firms to develop and test fintech solutions without full compliance.
Before the chatroom access, firms had to go through six months of planning a product or service before approaching the regulator, Arthur Yuen, HKMA’s deputy CEO, said in a speech during the Hong Kong Investment Funds Association conference last week.
In addition, non-banking firms, such as technology firms and fund management firms can now use the regulatory sandbox via the chatroom without going through a bank, he added. Previously, only banks with their partner technology firms could access the sandbox.
“Fund management firms can come to us and ask for our response if they think of [different] ways of distributing a product within the banking framework,” Yuen said.
Firms can access the chatroom via email with the regulator providing feedback within seven working days, according to an HKMA statement. Firms can also request for a video conference or a face-to-face meeting with the HKMA to obtain supervisory feedback to their proposals.
Second sandbox
HKMA’s second sandbox programme was launched in September. During the first sandbox, which was launched last year, around nine banks with 24 projects participated.
“More than half of those initiatives have resulted in full launch after testing for a few months,” Yuen said. “Generally speaking, the sandbox has cut back the product planning time for the industry.”
In Singapore, the Monetary Authority of Singapore received 30 applications for its sandbox. However, MAS said that half of the applicants didn’t require the sandbox.
Wealth and asset management-related fintech firms have participated in Singapore’s sandbox. They include Kristal Advisor’s robo-advisory platform, which was launched under the sandbox programme.
In Hong Kong, besides the HKMA, the Securities and Futures Commission and the Insurance Authority launched their own versions of sandboxes this year.
The three regulators introduced one common point of entry, according to HKMA’s Yuen. “So any fund management firm can approach one of us and we will do the coordination behind the scense. So from the receiving end, you will feel like there is only one sandbox.”
