The Malta Financial Services Authority (‘MFSA’) has launched the FinTech Regulatory Sandbox, and applications are now open for FinTech operators. The Sandbox is a regulatory environment where FinTech operators may test their innovations for a set period within the financial services markets under controlled conditions. The Sandbox will promote fostering financial innovation through new business models, applications, processes and products, whereby the financial services market will gain further legal certainty as the sandbox will provide an environment where both Participants and the MFSA can monitor the applicability of regulatory frameworks. In turn, the MFSA will gain knowledge through its oversight which will allow it to identify potential regulatory gaps and strengthen its supervisory role. This will ultimately serve to create a sustainable environment where consumers are afforded adequate protection and market integrity is ensured.
Applicants must satisfy a number of criteria to be admitted
The Sandbox is open to FinTech Service Providers, which are persons licensed to provide services requiring a license in Malta, and FinTech Suppliers, which are persons providing Fintech Solutions which do not require authorization in Malta. However, Applicants must satisfy a number of criteria to be admitted into the Sandbox. The Solution must be technologically enabled and innovative, and there must be a genuine need to test it. The Solution must also offer benefits to consumers and the financial services sector and should be ready for testing.
The Sandbox will be open to Applicants on an ongoing basis and shall consist of six stages which commence upon the submission of a Proposal. These stages consist of the proposal, selection, application, testing evaluation and exit stages. The latter three stages constitute the testing phase which shall take between six and twelve months.
Interested persons are to submit the Proposal through the online proposal form which can be accessed here. Applicants will need to submit the following details in the six different sections of the Proposal Form:
- Applicant Details
- Regulatory History
- Proposal Details
- Eligibility Criteria
- Testing Objectives
- Application Fees
Upon the submission of the Proposal, pertinent documentation and an administrative fee of €500, the MFSA assigns a Participant Development Lead who serves as a point of contact between the Applicant and the MFSA. The MFSA may also set up a preliminary meeting with the Applicant. This will be followed up by the selection stage, wherein the MFSA determines whether the Applicant may proceed to the Application Stage. During the Application Stage, Applicants will be subject to a fitness and properness assessment based on competence, reputation, conflicts of interest and independence of mind, and time commitment.