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SEBI Permitted Use of Regulatory Sandbox

Published on February 18, 2020
Current context: Securities and Exchange Board of India (SEBI) has decided to permit the use of regulatory sandbox at SEBI’s board meeting held in Mumbai on 17th February 2020.
SEBI Permitted Use of Regulatory Sandbox 
  • The regulatory sandbox is a system that will allow live testing of new products, services and business models by market players on select customers.
  • The 'regulatory sandbox' will serve as a testing ground for new business models and technologies that benefit investors, Indian markets and the economy at large.
  • Under the regulatory framework, the eligible entities will be granted the facility to experiment with fintech solutions in a live environment and on real customers.
  • The entities will be ensured that there are necessary safeguards for investor protection and risk mitigation.
  • At the meeting, it was decided to allow a cross domain approach for the regulatory sandbox, wherein a regulated entity will be permitted to test solutions even for those activities for which it is not registered.
  • The SEBI was established in 1988 and given Statutory Powers on 30th January 1992 through the SEBI Act, 1992.
  • Headquarters: Mumbai
  • Chairperson: Ajay Tyagi

Question: 

Q.1 Choose the correct statement about 'regulatory sandbox'?
  1. Recently, the Securities and Exchange Board of India (SEBI) has decided to permit the use of regulatory sandbox for registered entities
  2. SEBI has allowed a cross-domain approach for the regulatory sandbox, wherein a regulated entity will be permitted to test solutions even for those activities for which it is not registered.
a. Only 1
b. Only 2
c. Both 1 and 2
d. None of them
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