06/11/2019, 09:57 AM

Singapore is one of the countries that successfully applied Sanbox legal frameworks. At the end of 2016, the Singapore government with the ambition to encourage enterprises to develop financial technology has officially applied the Sandbox-testing – a mechanisms applied within the limited scope - allowing technology companies in areas that are not clear on regulations are permitted to test their solutions on the market, under the supervision of regulatory bodies. Accordingly, Nov. 16, 2016, Singapore Monetary Authority (MAS) has published the Fintech Regulatory Sandbox Guidelines to encourage and enable testing of solutions that use technology to provide financial products or services.

Creative startups in the financial sector that want to participate in the Sandbox legal framework must satisfy the requirements and principles specified in section 5 and 6 on the Fintech Regulatory Sandbox Guidelines of MAS. Accordingly, one of the standards of Sandbox is the need for financial services that must have "new", or the technology used in that service must be creative. In particular, a Fintech Regulatory Sandbox Guidelines confirms not to apply the Sandbox legal framework if the financial services are already offered in Singapore, unless the business proves the difference, the creativity of technology uses/or support services compared to the respective services that already exist in the market. If the experiment is successful and exits the Sandbox legal framework, creative startups in the financial sector have to comply with Singapore's legal regulations.

In particular, Singapore has adopted the Sandbox with two options:

  1. Sandbox experiments: For more complete business models where customisation is required to balance the risks and benefits of experiments.
  • The FinTech Regulatory Sandbox guidelines set out the objective and principles of the sandbox, and provide guidance to the applicant on the application process, the main evaluation criteria and the information to be furnished to MAS
  • Businesses applied the Sandbox experiments include:
    + Propine Technologies Pte Ltd (applied from Nov. 8, 2019 to Aug. 8, 2020);
    + Ichx Tech Pte Ltd (Applied from May. 01, 2019 to Jan. 31, 2020);
    + Inzsure Pte Ltd (exited sandbox on 31 Oct 2019).
  1. Sandbox Express: Fast-track approvals for activities where the risks are low and well understood by the market. Rely on disclosures and pre-determined rules.
  • Sandbox Express provides firms with a faster option to test certain innovative financial products and services in the market. Eligible applicants can begin market testing in the pre-defined environment of Sandbox Express within 21 days of applying to MAS.
    Sandbox Express will be available specifically for:
    + Carrying on business insurance brokers;
    + Establishing and Operating of an organized market;
    Remittance business.
  • Businesses applied the Sandbox Express legal framework include:
    + Bondevalue Pte Ltd (Applied from Oct. 02, 2019 to Jul. 01, 2020);
    + Synoption Pte Ltd (Applied from Jan. 01, 2020 to Sep. 30 2020).