Fintech Supervisory Sandbox: Pilot Conditions for Banks and Tech Firms
Overview of the HKMA's Fintech Supervisory Sandbox for banks and tech firms.
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 with a limited number of participating customers. This is possible without the need to achieve full compliance with the HKMA’s supervisory requirements.
Who Can Apply and How It Works
The FSS is available to fintech and other technology initiatives intended to be launched in Hong Kong by banks. To qualify, a project must have a bank in Hong Kong as a project sponsor.
It’s important to note that the FSS should not be used as a means to bypass applicable supervisory requirements. Also, the HKMA has not laid down an exhaustive list of the supervisory requirements that may potentially be relaxed within the FSS environment.
FSS 3.0 and Research Funding
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).
Frequently Asked Questions
Can startups apply directly to the FSS?
The FSS is available to fintech and other technology initiatives intended to be launched in Hong Kong by banks, and qualifying projects must have a bank in Hong Kong as a project sponsor.
Are all supervisory requirements relaxed in the sandbox?
No. The HKMA has not laid down an exhaustive list of the supervisory requirements that may potentially be relaxed within the FSS environment, and the sandbox should not be used to bypass applicable supervisory requirements.