In the latest update to the framework of its regulatory sandbox, the Saudi Central Bank (SAMA) has shifted its fintech development community from a cohort to an ‘always open’ approach.
The update will allow both local and international applicants to apply for SAMA’s Regulatory Sandbox, irrespective of whether the applicants are entrepreneurs, non-regulated companies or existing regulated entities.
The key differentiator of the updated framework is the move from a cohort-based approach to what SAMA characterises as an ‘always open’ approach, deepening and diversifying the pool of applicants
SAMA launched its Regulatory Sandbox initiative back in 2018 in an attempt to consolidate local, regional and international fintechs and bring more innovative financial products and services to Saudi markets.
The initiative has enabled SAMA to adopt various services and products by issuing instructions and regulations, as well as launching many of those products and services into the financial sector.
Now applicants will now be able to develop their own concepts rather than one that is determined for the cohort.
To date, 38 companies have had their services certified by SAMA’s Regulatory Sandbox.
The Regulatory Sandbox abides by the kingdom’s Financial Sector Development Programme (FSDP).
As a cornerstone of the Saudi Vision 2030, the FSDP is the kingdom’s economic development initiative that seeks to diversify its sources of income, enable its financial institutions to support the growth of the private sector while encourage new companies to provide their own financial services.
Operating within a holistic framework, the strategy will support a broad range of fintech activities through several initiatives, the most notable of these initiatives is having its framework updated; as it will allow fintech companies to submit Regulatory Sandbox applications as of 6 September 2022.
In cooperation with Saudi Fintech, SAMA is expected to host an introductory workshop on the updated regulatory framework for the legislative experimental environment.