Regulatory Sandbox Processes & Timelines

1. Innovator Exit Ebtaker Innovation Hub Support
2. PCMA Instructs the Innovator to Proceed to Regulatory Sandbox Testing
3. Innovator is ready and qualify to proceed straight to Regulatory Sandbox Testing

• Test Against Eligibility Criteria
  • Check if Ebtaker Innovation Hub Support is more Appropriate
• Prepare Application
• Submit the Application using the Online Form
• Application is received online by the PCMA
• PCMA Checks completeness of information submitted in the application
  • Reject the Application If Eligibility Criteria not Met or Applicant is Unresponsive
• Ask for further information or clarification if necessary
• Accept the Application
• Proceed to Evaluation Phase

1 Requirements when preparing the Application

• Complete all required documents necessary for the application process, including all the requirements contained in the executive controls mentioned in paragraph (2) of Article (3) of the Instructions.
• A detailed description of the financial services or product to be tested in the Sandbox
• The innovator should provide a business plan to help the PCMA understand their business model and how they plan to execute its operation.

• A solid test plan that contains at the least, a timeline for the Sandbox testing, including milestones and clear methodology of the test, and highlights the controls implemented to ensure the test is conducted in a safe manner.
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• Specify clear objectives for the test with key performance indicators providing feedback on the success of the test

• A clear exit plan, including the process of transitioning into business as usual, in the event that the test is successful, as well as a wind down plan if the test proved unsuccessful, or the regulator is forced to stop the test. In both cases, the applicant must ensure that customers are not exposed to any harm resulting from a failed or halted test or where the firm transitions to business as usual.
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• The innovator must provide evidence of the availability of the required resources to carry out the test, including financial, human and technical resource.

• Demonstrate through documentation that the innovator meets all the necessary requirements to protect customers’ rights during the test.

• Provide details on the mechanism to handle complaints, as well as details on when and how customers will be compensated if their complaints are upheld.

• Provide documentary evidence to demonstrate that the innovator has robust mechanisms to protect user’s data and privacy.

• Present a risk management plan, including the risks expected during the testing process, and how the innovator plans to mitigate such risks.

• Documentation or a written note to demonstrate that the innovator is ready to conduct the test. In other words, they have a solid business plan, have identified and agreed with customers and partners to participate in the test, they have the necessary systems, controls and people to run the test, as well as the resources needed for the test.
• The PCMA has the right to request any additional information as it deems appropriate to evaluate the application from the innovators for Sandbox Testing

 2 The applicant must provide any requested information or answer questions as quickly as possible and within the timelines specified by the PCMA.  If the information requested remains outstanding or questions remain unanswered for up to a maximum period of 30 days, the PCMA shall have the right to refuse the application, unless the applicant provides reasonable grounds for the delay.

3 PCMA will have 30 days to either accept the application, or reject the application.

• Application is accepted by PCMA to proceed to Evaluation Phase

  1. Questions successfully answered
  2. Additional information provided as requested.
• Application Reviewed by PCMA
• Eligibility Criteria Met?
• Criteria not Met or Innovation not Ready for Testing
• Referred to Innovation Hub Support for Further Assistance
• PCMA Decision to Allow Sandbox Testing or NOT?
• PCMA Issue Rejection Letter with Justification
• Applicant can Submit Additional Information after Notifying PCMA
• Additional Info Accepted by PCMA?
• Application Rejected
• PCMA issue a Letter of Acceptance for the Test

(examples of activities include)

• Ensure users and partners have read all documentation and contracts, and are aware of the risks, the complaints procedure and compensation mechanisms.
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• Sign up users and partners through formal contracting
• Ensure systems and controls are working – conduct testing to satisfy PCMA.

• Ensure the firm has the necessary resources in place to conduct the test.
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• Conduct testing of the business operations from the front end customer awareness, through to fulfilment of an instruction by the customer or provision of the financial services or delivery of a product.
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• Conduct a full end to end demonstration for PCMA to get their approval
• Conduct security checks and gain assurance of risk management processes.
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• Agree Go Live date with PCMA
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PCMA Evaluate Readiness for Testing (on site inspection may be needed)

Innovator Continues with Preparatory Work to the Satisfaction of PCMA

(examples of activities include)

• Comply with Periodic Reporting on progress, as per reporting requirements stipulated by the PCMA
• Notify the PCMA if the test is not going according to what is planned, and inform them how the innovator will bring the test back on track
• Notify the PCMA of any material harm to consumers or partners
• Obtain prior approval of the PCMA if changes are needed for the testing process – for example, change in business model, marketing tactics or acquisition of new clients or partners, etc.
• Notify the PCMA immediately if there are any obstacles that prevent testing or lead to the cessation of testing

Move to Graduation Phase

Note:  The testing phase shall not exceed a period of 6 months.  However, this period can be extended by a further 3 months in exceptional circumstances and subject to approval from the PCMA

1. The test is successful and the Time frame specified for Sandbox testing has been completed
2. The test is suspended by the PCMA due to violation of conditions or the test pose a risk
3. The test fails and a Voluntary submission by the innovator to PCMA to stop the test (one month prior to stopping of test)
4. Innovator Commits to following the Agreed Graduation

• Ensuring any existing obligations to users have been fulfilled or addressed before exiting the Sandbox

5. Innovator Submits a Detailed Report to the PCMA on the Results of the Test

• Report Submitted within 15 Days of the Date of the End of the Test

6. PCMA Assess Whether Graduation Plans Have been Complied With?
7. PCMA Issue a Letter of Thanks to Innovator for Completing the Sandbox Testing
8. Existing Regulatory Framework is a Neat Fit for Innovation?
9. PCMA Issue “No Objection Letter” – allowing Innovator to Continue Operating Until Regulatory Framework is Developed
10. Proceed to Licensing Phase (if needed)
11. PCMA Notified Innovator of the Failed Test
12. Innovator Undertakes to & Prepare Wind Down the Test in a Safe Manner
13. PCMA Assess Adequacy of Safe Wind Down
14. Innovator Cease and Desist All Regulated Activities