Regulatory sandbox for the Fintech industry coming to Norway in 2019
In a letter dated 12 November 2018, the Norwegian Ministry of Finance has tasked the Norwegian FSA with establishing a regulatory sandbox for the FinTech industry. The sandbox will start accepting applications sometime in 2019 (At the latest 31 December 2019, but the Ministry urges the Norwegian FSA to start accepting applications earlier, if practically possible.).
A Norwegian regulatory sandbox for the FinTech industry will enable Norwegian Fintech start-ups to test innovative products, technologies and services on a limited number of customers for a limited period of time under the strict supervision of the Norwegian FSA. The projects using the sandbox must meet a number of requirements, but the supervisory authority may suspend certain of these based on a principle of proportionality to the extent permitted by the relevant regulatory regime. The sandbox will put in place its own requirements for testing and supervision. Admissions to the sandbox should, according to the Ministry, take place semi-annually.
The Norwegian Minister of Finance, Siv Jensen says, «The sandbox will help new Fintech-players, with little or no experience handling a complex legal regime and supervising authorities, to understand what requirements and regulations apply to them. The sandbox may lead to new services more speedily coming to market. Equally important is that the close supervision of the participants in the sandbox will provide the Norwegian FSA with a better understanding of the challenges posed by new business models and new technologies. This understanding may be useful in the supervision and guidance of businesses outside the sandbox.»
In order to be eligible for using the Fintech regulatory sandbox, a project must be subject to the financial regulatory regime, involve a genuine innovation and be deemed to be beneficial society and/or consumers. The regulatory sandbox will be reserved for projects where testing in the sandbox is deemed necessary for bringing the project to fruition. In the opinion of the Ministry, only a limited number of projects will be eligible for using the sandbox. Most projects will be able to comply with regulatory requirements and being brought to completion by seeking general advice from the Norwegian FSA.
Currently, three other EU countries have Fintech regulatory sandboxes up and running; the United Kingdom, Denmark and the Netherlands. These sandboxes have been set up as part of a broader initiative supporting information- and consultation pertaining to the Fintech industry.
The Ministry of Finance asks that the Norwegian FSA liaise with representatives of potential users as part of their work, hereunder FinanceNorway, IKT-Norway, the Norwegian Competition Authority, the Norwegian Consumer Authority and the Norwegian Data Protection Authority.
Furthermore, the Ministry of Finance has asked that the Norwegian FSA in their work pay particular attention to the UK and Danish sandboxes and the ongoing work in the EU identifying best practice for assisting the Fintech industry.
The Ministry of Finance asks to be briefed about how the work progresses by 15 March 2019 in order for the Ministry to be able to brief the Parliament about the same in the Financial Market Report 2019.