The Central Bank of the UAE (CBUAE) has issued the Sandbox Conditions Regulation, which aims to attract startups and global fintech businesses and create an attractive environment for the financial sector. This supports creativity and innovation within a regulatory and supervisory framework. The regulation will also help consolidate the financial sector’s competitiveness and support the UAE’s economic growth.
Regulatory framework and participant conditions
The regulation outlines specific conditions that must be met by participants, including startups, fintechs, and established businesses looking to deliver innovative solutions and services in the financial services sector. It further allows them to test innovative business models, products, and services within a specified duration, provided they constantly comply with regulatory obligations to ensure the best outcomes for all stakeholders.
The #CentralBankUAE has issued the Sandbox Conditions Regulation, which aims to attract start-ups and global fintech businesses and create an attractive environment for financial sector that supports creativity and innovation within a regulatory and supervisory framework. It will…
— Central Bank of the UAE (@centralbankuae) June 25, 2024
Enabling proactive supervision, regulatory compliance
These conditions enable the CBUAE to proactively and effectively assess and respond to these innovations as part of its supervisory activities. They also help participants structure their businesses in a regulatory-compliant manner.
Application requirements
Applicants are required to present a technologically innovative financial product, service, solution, or business model that may benefit consumers and/or the wider industry. Additionally, participants must demonstrate an intention to deploy the proposed service in the UAE on a broader scale after exiting the regulatory sandbox.
Read more: CBUAE’s gross written premiums up 18.5 percent YoY in Q1 2024 to $5.74 billion
Promoting innovation, protecting stakeholders
Moreover, Khaled Mohamed Balama, governor of the CBUAE, stated that the issuance of the Sandbox Conditions Regulation is a testament to the UAE’s commitment to enabling innovation and building a knowledge-based national economy. By providing a structured platform for experimentation, the regulation encourages innovators to contribute positively to the wider economy while ensuring consumer protection and achieving the interests of all stakeholders.
The regulation has been published in the Official Gazette and has come into effect.
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