By 
UK regulators have unveiled draft guidance for firms seeking entry into the country’s pioneering Digital Securities Sandbox (DSS), inviting feedback from industry stakeholders.
The DSS aims to adapt UK regulations to facilitate the adoption of innovative technologies, such as distributed ledger technology, in the trading and settlement of digital securities like shares and bonds.
Successful applicants to the DSS will have the opportunity to offer securities depository and settlement services and operate a trading venue under modified regulations. Notably, they will be permitted to provide these services from a single legal entity for the first time.
With 19 expressions of interest already received from incumbent financial market infrastructures, banks, and new market participants, the sandbox’s inaugural tests are scheduled to span five years.
The Bank of England and the Financial Conduct Authority (FCA) have released draft guidance for these firms, outlining how the Bank plans to facilitate the scaling of their activities once authorized to engage in live operations.
Industry stakeholders are encouraged to provide feedback on the practical operation of the sandbox.
Sasha Mills, Executive Director of Financial Market Infrastructure at the Bank of England, underscores the significance of the Digital Securities Sandbox, stating: “The Digital Securities Sandbox serves as a crucial tool for regulators to understand how to safely harness advancements in technology and adapt to critical changes in financial market processes such as securities settlement.”
Sheldon Mills, Executive Director of Consumers and Competition at the FCA, emphasizes the transformative nature of the Digital Securities Sandbox: “The new Digital Securities Sandbox revolutionizes regulatory oversight by enabling firms to test regulatory adjustments in real-world scenarios before implementing permanent changes. We anticipate that this approach will foster more effective, collaborative, and expedited regulatory transformations.”
Comments