The Securities and Exchange Board of India (SEBI) is planning to come out with a policy on sandbox to encourage technological innovations in financial markets.
According to Ajay Tyagi, Chairman, SEBI, the regulator is examining if there are any changes in laws that are required to allow sandbox.
“We will come out with a policy on sandbox soon. We are currently examining if any changes in laws would be required in terms of dispensation that may be needed to be given,” Tyagi told newspersons on the sidelines of the 8th India Finance Conference organised by Indian Institute of Management, Calcutta here on Thursday.
A sandbox approach typically allows companies to experiment and test certain innovative products even before filing for approval or registration of the same. Depending on the success of the experiment companies can decide whether they would want to go ahead and seek approval for the same. Apart from promoting innovation in the industry, this would also help contain the impact of failures.
IRDAI too working on guidelines
It is to be noted that the insurance regulator, IRDAI (Insurance Regulatory and Development Authority of India), is also working on adopting a sandbox approach and has also formed a committee to look into it. It is hopeful of coming out with the guidelines soon.
Tyagi further said that SEBI was also exploring if the concept can be introduced without making any change in legislation.
“We are also seeing if without any change in legislation if something new can be tried out. We are working on it,” he said.