Fintech Supervisory Sandbox: Pilot Conditions for Banks and Tech Firms
The HKMA's Fintech Supervisory Sandbox lets banks and tech firms pilot fintech initiatives with a limited number of customers under relaxed supervisory requirements, subject to conditions.
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 to conduct pilot trials of fintech initiatives with a limited number of participating customers. During these trials, participants do not need to achieve full compliance with the HKMA’s supervisory requirements.
Eligibility and Scope
The FSS is available to fintech and other technology initiatives intended to be launched in Hong Kong by banks. However, qualifying pilot projects under FSS 3.1 must have a bank in Hong Kong as a project sponsor.
Additional Support for R&D Projects
Beyond the pilot trial function, FSS 3.0 also facilitates eligible research and development (R&D) trials to apply for funding support of up to HK$1 million under the Innovation and Technology Commission’s Public Sector Trial Scheme.
Important Considerations
The FSS should not be used as a way to bypass applicable supervisory requirements. The HKMA has not published an exhaustive list of the supervisory requirements that may potentially be relaxed within the FSS environment.