CBUAE Issues New Regulation To Foster Innovation In Financial Services Sector

The Central Bank of the UAE (CBUAE) has introduced the Sandbox Conditions Regulation to attract start-ups and global fintech companies. This initiative aims to foster an environment conducive to creativity and innovation within a regulatory framework, enhancing the financial sector's competitiveness and supporting the UAE's economic growth.

The Regulation specifies conditions for participants, including start-ups and established businesses, to deliver innovative solutions in the financial services sector. It also details criteria for exemption from obtaining a licence, allowing them to test new business models, products, and services within a set timeframe while adhering to regulatory obligations.

Participants must present a technologically innovative financial product, service, solution, or business model that benefits consumers or the industry. They must also show an intention to deploy the proposed service on a broader scale in the UAE after exiting the Regulatory Sandbox.

Khaled Mohamed Balama, Governor of the CBUAE, stated, "The issuance of the Sandbox Conditions Regulation is a testament to the UAE's keenness towards enabling innovation and building a knowledge-based national economy. By providing a structured platform for experimentation, we are encouraging innovators to contribute positively to the wider economy and participate actively in Sandbox Conditions Regulation, whilst ensuring consumer protection and achieving the interests of all stakeholders."

These conditions enable CBUAE to assess and respond proactively to innovations as part of its supervisory activities. They also help participants understand how best to structure their businesses in compliance with regulations.

The Regulation has been published in the Official Gazette and is now in effect.

With inputs from WAM