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Regulatory ‘sandbox’ to test finance innovations
Sharon Donnery Pic: RollingNews.ie

04 Jun 2024 / regulation Print

Regulatory ‘sandbox’ to test finance innovations

The Central Bank has confirmed that it will set up a regulatory ‘sandbox’ programme later this year to encourage the development of innovative projects in the financial sector.

Regulatory sandboxes allow firms to test innovative products in the market within a framework that is approved by the sector’s regulator.

The Central Bank’s announcement follows a three-month public consultation, and comes alongside a feedback statement to a consultation on the regulator’s approach to engagement with innovation in the financial sector.

Thematic approach

The bank said that the sandbox programme would take a thematic approach, with the issuing of themes and a call for potential participants in the coming months, and the first programme to start in the final three months of this year.

The programme will be open to applications from anyone developing innovations for the financial system and will have a transparent application process.

“Given the predominantly EU basis of most regulatory requirements and the importance of protecting consumers’ interests, the Central Bank does not propose to provide derogations or waivers from regulation,” it stated.

“The sandbox will apply the regulatory framework proportionally, with an outcome-focused, risk-based approach,” the bank added.


Sharon Donnery (deputy governor for financial regulation) said that the Central Bank could play an important role in harnessing the benefits of innovation, while also managing the risks.

She added that the proposals would help to foster innovation in financial services.

“And they will help firms to build safeguards into their early-stage development, embedding a regulatory culture to ensure they are properly prepared for the responsibilities that come as regulated firms,” Donnery concluded.

Gazette Desk
Gazette.ie is the daily legal news site of the Law Society of Ireland