Hong Kong SAR – GFIN fails to find suitable applicants in 2019 and reports on lessons learnt
The Global Financial Innovation Network (GFIN) was established in January last year as a network of regulators from around the globe to collaborate on a global sandbox and carry out joint policy work and regulatory trials. It has grown to include over 50 organisations, including the MAS, HKMA and the FCA, and this week it published an update on the progress of its “global sandbox”.
The GFIN notes that one its early priorities has been the development of cross-border testing, previously known as the “global sandbox”
concept and last year invited firms to apply. Despite announcing in April 2019 that following a screening process, GFIN had identified eight potential firms to develop testing plans for their cross-border trials, GFIN has since confirmed that they were unable to take forward any of the eight firms. According to the report, the firms did not develop a testing plan that satisfied each jurisdiction’s criteria, and many were not yet fully operational and ready to test. The report notes that there was a lack of applications from large or international firms.
GFIN is committed to further testing and has therefore implemented a three step solution:
- Single GFIN website – for clearer communication to prospective applicants.
- Regulatory compendium – this sets out information on the types of activity the regulators can support, and help ensure firms are clear on needs/criteria of participating regulators.
- Single application form – previously firms had to duplicate information across multiple forms and GFIN regulators were circulating all materials received in order to determine whether there was conflicting information in applications sent to different regulators.
Late last year, the GFIN regulators agreed to open applications for the first formal cohort of participants in the first half of 2020, and have promised further announcements about timing in due course. The changes should ensure there is more clarity around the requirements and a joined-up, streamlined approach to facilitate effective testing, as well as emphasising the value in taking part in the cross-border testing.