The FinTech Regulatory Sandbox to drive innovation in securities sector

To encourage innovative financial technology (fintech) in the Kingdom’s securities sector, the Securities and Exchange Regulator of Cambodia (SERC) has created the FinTech Regulatory Sandbox.

The FinTech Regulatory Sandbox is an environment allowing firms to experiment with innovative financial products or services with real customers in a production environment, but within a well-defined space and for a limited duration before launch and promotion on a broader scale.

Firms looking to apply technology in an innovative way to provide financial products or services likely to be regulated by SERC can apply for approval to enter the FinTech Regulatory Sandbox.

To obtain approval to enter the sandbox, applicants need to fulfil the requirements, principles and criteria as defined in Guideline No 001/22 on FinTech Regulatory Sandbox in the Securities Sector, dated April 11, 2022.

The sandbox aims to encourage fintech experimentation within a well-defined space and timeframe so as to:

• Increase efficiency;

• Manage risk better;

• Create new opportunities;

• Improve people’s lives.

The principles of the Fintech Sandbox include:

• There will be no similarities to existing financial products or services in the securities sector;

• Innovations should create added value for existing financial products in the sector;

• Benefits that can be determined directly or indirectly for customers or the securities sector must be provided;

• Providing a well-defined space and timeframe for experimentation;

• The risks and consequences arising from a failed experiment can be contained;

• Due diligence will be complied with, including when testing the proposed financial products and services in an experimental environment, with the legal and regulatory requirements understood.

To encourage innovation, SERC will consider relaxations or exemptions to regulatory requirements for the duration of the Fintech Sandbox.

This could either be in the form of a comprehensive exemption or specific exemptions on a case-by-case basis, depending on the financial product or service to be experimented with and the subject of the experiments, or at the request of the applicant.

Upon successful experimentation and exiting the sandbox, the entity must fully comply with the relevant legal and regulatory requirements.

Reference: Guideline No 001/22 on FinTech Regulatory Sandbox in the Securities Sector, dated April 11, 2022.

Prepared by: Securities and Exchange Regulator of Cambodia, Securities Intermediaries Supervision Department.

Email: intermediaries@secc.gov.kh.
Phone: 023 885611.

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