Market infrastructure body backs FCA global sandbox

The World Federation of Exchanges has thrown its weight behind an FCA proposal to create a global regulatory sandbox, reiterating its support for an internationally coherent supervisory approach to emerging financial technologies.

Last month, the UK’s Financial Conduct Authority floated the idea of a global regulatory sandbox, enabling fintech firms to carry out tests in different countries at the same time and helping watchdogs to identify and solve common cross-border problems.

The FCA says that, while it has nine bilateral cooperation agreements with other jurisdictions which encourage dialogue between regulators, it does not offer firms the chance to participate in a joint sandbox programme.

For the WFE, which represents the interests of more than 200 market infrastructure providers including exchanges and CCPs, the notion of a cross-jurisdictional sandbox is particularly appealing.

Nandini Sukumar, CEO, The WFE said: “Regulatory sandboxes and innovation hubs have proven to be a useful tool for the fintech industry and these should be extended – where relevant – to ensure that appropriate collaboration and exchange of information occurs between industry – whether regulated, or not – and regulator.”

The Federation’s backing for the initiative follows the publication earlier this week of a report on fintech in the market infrastructures space which identified the big tech firms of Apple, Amazon and Google, as the outsiders with sufficient heft to rewire the world’s financial markets.