Fintech Supervisory Sandbox (FSS): Pilot Conditions for Banks and Tech Firms
HKMA's FSS lets banks and tech firms pilot fintech with limited customers without full compliance. Launched 2016, now FSS 3.0 offers R&D funding.
What Is the Fintech Supervisory Sandbox?
The Fintech Supervisory Sandbox (FSS), launched by the Hong Kong Monetary Authority (HKMA) in September 2016, allows banks and their partnering technology firms (tech firms) to conduct pilot trials of fintech initiatives involving a limited number of participating customers without full compliance with the HKMA’s supervisory requirements.
The FSS is available to fintech and other technology initiatives intended to be launched in Hong Kong by banks.
FSS 3.0 and Funding Support
In addition to the pilot trial function offered by FSS 2.0, FSS 3.0 facilitates eligible trial projects of research and development (R&D) to apply for a maximum of HK$1 million funding support under the Innovation and Technology Commission (ITC)‘s Public Sector Trial Scheme (PSTS).
Conditions and Boundaries
The FSS should not be used as a means to bypass applicable supervisory requirements.
The HKMA has not laid down an exhaustive list of the supervisory requirements that may potentially be relaxed within the FSS environment.
Qualifying FSS 3.1 Pilot projects must have a bank in Hong Kong as a project sponsor.
Frequently Asked Questions
Who can use the FSS?
Banks and their partnering technology firms can conduct pilot trials, provided the initiative is intended to be launched in Hong Kong by a bank.
Does the FSS grant full regulatory relief?
No, it is not meant to bypass supervisory requirements, and the HKMA has not specified an exhaustive list of relaxable requirements.