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BVI EMBRACES FINTECH: FSC FinTech Regulatory Sandbox to Launch Next Month

31 July 2020

The BVI Financial Services Commission (FSC) is gearing up to launch its FinTech Regulatory “Sandbox” on August 31, which will provide financial institutions with the digital infrastructure to test new products and services. In a presentation titled: “Playing in the Sandbox: The BVI Embraces FinTech”, by FSC Deputy Director of Investment Business Mrs. Kishelle Blaize-Cameron and FSC Director of Enforcement Mr. Brodrick Penn, the FinTech Sandbox Life Cycle was thoroughly explained; from application to launch and exit.

Assurances came from the Commission’s senior management team that they are “fully embracing” the new direction, and are “ensuring that advancements in innovation in financial services business continue”. Mrs. Blaize-Cameron laid out the objectives for the sandbox, which include: “promoting efficiencies by encouraging new solutions; leveraging existing or new technology in an innovative way in order to deliver new financial products or services or to improve business processes; providing regulatory clarity on whether a new financial product or service complies with legal and regulatory requirements; and developing a targeted regulatory response”. She also described the Sandbox Life Cycle, which includes the application and considerations process; the launch stage, where approved applicants are given 90 days to launch their FinTech operation; the testing stage which lasts up to 18 months (with a six-month extension in particular cases); and the existing stage.


The deputy director emphasised that applicants must have “an element of innovative FinTech” to be allowed to participate in the sandbox. These ‘eligible persons’ are listed as: “a startup proposing a new financial services solution, that involves a FinTech business model that is not currently covered (whether explicitly or implicitly) under current regulatory legislation and may require issuance of new regulations; a startup who wishes to test an innovative technology to deliver a licensable financial service; or current licensees who wish to test an innovate technology as a part of their already approved financial service offering”. Applicants will receive confirmation of their eligibility within 30 days of application. However, there is not a specific turnaround time for the evaluation stage after eligibility is confirmed.

Proposed Niches and Testing Categories

During the consideration stage, the Commission assesses whether participants are engaging in one of the defined “testing categories”; which Blaize-Cameron assured would be updated to reflect the current needs of the market, and in special circumstances where business falls outside of the proposed niches, the Commission will look at each applicant on a case-by-case basis. Proposed niches are as follows: FinTech Credit Services, Payments, Investment Management, Securities, and Insurance Technology. Testing categories include Peer to Peer Lending, Online Lending (using own capital), Cryptocurrency E-Wallets, Merchant Payments and Point-of-Sale Services, International Remittance, Mobile Payments, Robo Advisors, Micro-investing platforms, Cryptocurrency exchange and Insurance Aggregators. Of ineligible applicants, Mrs. Blaize-Cameron stated, “It’s not an incubator sandbox...if you are not ready to launch, you will not be eligible to enter” and went on to explain that this may include entities submitting business proposals that are not sufficiently developed. In addition, entities “that fall outside the risk tolerance of the sandbox due to nature, size and complexity” are ineligible.

Applicant Criteria

The application stage for the FinTech Sandbox has four main criteria. They are the Business Proposal and Risk, Resources, Readiness for Testing and Exit Plans. The Business Proposal and Risk Criterion must include the Target Client Base, Financials (projected cost, overhead and profits), Technological Architecture (type of technology to be utilised), Remuneration Structure, Customer Redress Mechanism along with Risk and Risk Management. The Resources criterion includes the Human expertise, Technological and Financial resources available. As for Readiness for Testing, the application must show the stage of development. The final criterion is the Exit Plan, which indicates whether applicants plan on winding down or transitioning to a licence.


The fee structure distinguishes three business types: the Standard/ Non-Complex, Moderately Complex and Complex. While the application fee is $2000 for each model, the approval fee varies according to the complexity. Standard/Non-Complex models incur a $2000 fee, Moderately Complex models incur a $5000 fee, and Complex models incur a $10000 fee. The Q&A portion of the webinar included questions on RegTech, to which Mr. Penn responded, “Regulation tech is quite high on the Commission’s strategic agenda and we are currently looking at our risk assessment models...while it remains partially manual, we are moving in the right direction. Our expectation is that in the near future, we use RegTech including technology to allocate risk assessments.” He also said he expects to see RegTech participating in the sandbox, and “it won’t be surprising to see applications in that sphere”. Regarding the benefits of the sandbox, Mr. Penn said “It is probably the only level of regime right now in the BVI that will give some level of stamp of approval for FinTech businesses. It gets you off the ground...We recognise there are some businesses that are already in the FinTech space, and it gives you the opportunity to enter the market.” Cameron-Blaize noted that a lot of the interest has been shown in the investment management, crypto-exchange, and payment option spaces. To that end, she said, “We try to open the sandbox to testing categories where we see immediate benefits to our local economy, as well as the possibility to expand the current financial services offerings that we permit in BVI”.

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