The Establishment Of Regulatory Sandbox In China

While promoting the continuous innovation of financial products and services,the Financial Technology(FinTech)has also triggered many risk events,which brings new challenges to financial regulation.How to achieve balance between promoting innovation and effective regulation has been essential for the healthy development of the financial system and the stability of the financial order.The Regulatory Sandbox firstly introduced by the UK and then dialectically applied by other countries has provided new ideas for solving such problem,as well as beneficial reference for changing concept of financial regulation,improving regulatory methods and innovating regulatory tools.This article analyzes the value and risk of Regulatory Sandbox based on its certain basic issues,discusses the necessity of introducing Regulatory Sandbox in China and puts forward suggestions for the construction of Chinese Regulatory Sandbox with learning from foreign experience.The Regulatory Sandbox provides a "safe place" for financial innovation to be tested.To analyze the nature of Regulatory Sandbox on the basis of regulatory time,method and concept,it is pre-regulation and permission regulation,fault tolerance regulation and flexible regulation,as well as prospective regulation,initiative regulation and adaptive regulation.To guide and standardize FinTech innovation with Regulatory Sandbox will be beneficial to FinTech companies,regulatory authorities and financial consumers.However,there are also some limitations,such as high test cost,long test period and difficulty in evaluating test effect.In addition,it is necessary to further clarify the legal issues concerning power granting,obligation fulfillment and liability undertaking in terms of the Regulatory Sandbox.China's FinTech is developing rapidly and enjoys a promising future,which has gradually become important driving force for the development and reform of the financial industry.However,FinTech has also brought new challenges to financial regulation.Problems such as lack of regulation,ineffective regulation and lagging regulation are increasingly exposed.Therefore,it is necessary for China to introduce Regulatory Sandbox,promoting the innovation of financial regulation mechanism and achieving the balance between government intervention and market adjustment in FinTech field.The UK,Singapore and Australia have established Regulatory Sandboxes suitable for their national conditions according to their respective development needs,as well as formulated specific testing requirements in combination with the development level of FinTech.China shall,with the view of dialectically learning from foreign experience,adhere to the regulatory concept of principle orientation and dynamic adjustment to introduce the Regulatory Sandbox based on China's actual conditions.Specifically,the promotion and implementation of relevant issues of Regulatory Sandbox shall be coordinated by the Financial Stability and Development Committee and the Financial Technology Committee shall be responsible for the details.Additionally,local financial regulatory authorities and industrial associations shall provide cooperation on their own initiative.The exemption mechanism within the Regulatory Sandbox requires the explicit authorization by departmental rules and soft laws shall be an important supplement.Furthermore,obligations and liabilities of relevant parties shall be specified.In terms of test subjects and projects,all products and services of financial institutions,quasi financial institutions and FinTech companies satisfying genuine innovation standard shall be allowed to propose application.However,sound consumer protection schemes,risk prevention arrangement and dispute resolution mechanism are required to be developed.