Dutch financial supervisors the Authority for the Financial Market (AFM) and De Nederlandsche Bank (DNB) are easing access of innovative services to the market for financial services through a new approach, the "regulatory sandbox". In the light of the rapid financial-technological developments, they will from now on focus on the real purposes of policies, rules and regulations when assessing innovative products, services or business models and use the scope of the law to provide bespoke solutions. They will also assess whether established policies, rules or regulations require any changes to accommodate for the new developments.
These policies are detailed in the document "More room for innovation in the financial sector: Market access, authorisations and supervision: Next steps," as published today by the AFM and DNB, which has been annexed to a letter sent by Minister of Finance Jeroen Dijsselbloem to the Lower House of Dutch Parliament.
The purpose of the tailored policy options is to offer a bespoke service enabling market operators to roll out their innovative financial products, services or business models without undue obstacles. With the regulatory sandbox the supervisors will take their cue from the purpose of a rule when assessing innovative products, services or business models. And if these purposes are met, they will use the scope offered by the law to provide a bespoke solution. Rather than relinquishing the standards, they will merely review and fine-tune them to accommodate innovation.
As of the beginning of 2017, in addition to the "regulatory sandbox", companies could also take advantage of partial authorisation, an authorisation with requirements or restrictions, or an opt-in authorisation. These options earlier this year were the subject of the joint discussion document "More room for innovation in the financial sector," to which market operators could respond via the InnovationHub of the AFM and DNB.
In the first six months of 2016, the InnovationHub received 114 requests for information from market operators about innovative initiatives in the financial sector. More than three quarters of the questions related to market access and the authorisation policies, mostly focusing on innovations in payments – partly in the light of the revised Payment Services Directive PSD2 – and blockchain technology.
For more information, please contact Michiel Gosens, spokesperson at the AFM (+31 6 4664 4024).
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As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.