The Central Bank of the UAE (CBUAE) has issued the Sandbox Conditions Regulation, which aims to attract start-ups and global FinTech businesses.
The Regulation has been published in the Official Gazette and is in effect, said the CBUAE in a statement on 25 June 2024.
The CBUAE said that the Regulation aims to create an attractive environment for the financial sector to support creativity and innovation within a regulatory and supervisory framework. It will also consolidate the financial sector's competitiveness and support the UAE's economic growth.
Criteria
The Regulation outlines specific conditions that must be met by participants that are looking to deliver innovative solutions and services in the financial services sector. It outlines also the criteria exempting them from the requirement of obtaining a licence to allow them to test innovative business models, products and services within a specified duration, provided that they will comply with the regulatory obligations to ensure the best outcomes for all stakeholders.
These conditions allow the CBUAE to proactively and effectively assess and respond to these innovations as part of its supervisory activities, and enable participants to understand how best to structure their respective businesses in a regulatory-compliant manner.
Among other criteria, applicants are required to present a technologically innovative financial product, service, solution, or business model that may benefit consumers and/or the wider industry. Additionally, participants must demonstrate an intention to deploy the proposed service in the UAE on a broader scale after exiting the Regulatory Sandbox.
Mr Khaled Mohamed Balama, governor of the CBUAE, said, “The issuance of the Sandbox Conditions Regulation is a testament to the UAE's keenness towards enabling innovation and building a knowledge-based national economy. By providing a structured platform for experimentation, we are encouraging innovators to contribute positively to the wider economy and participate actively in Sandbox Conditions Regulation, whilst ensuring consumer protection and achieving the interests of all stakeholders.”