SEC to launch 3 sandbox participants

MANILA, Philippines — The Securities and Exchange Commission (SEC) is looking at potentially three sandbox participants launching their products and services in the local market soon.

SEC commissioner McJill Bryant Fernandez said the commission has recently approved two sandbox applications that will offer capital market and IT-related products and services.

“We’re just waiting for their respective platforms to be completed because of course, they have to develop their IT platform. But we want them be launched already,” he said.

Fernandez said the regulator is also considering for approval another sandbox application.

“I think we raised questions on their proposal. But offhand, we’re favorably considering it except that we’d have to refine their proposal,” he said.

SEC Memorandum Circular 9, Series of 2024 provided the framework of the regulatory sandbox in line with the commission’s mandate under the Securities Regulation Code to encourage competitiveness in the market through promulgation of rules for registration and licensing innovative and other trading tools.

The SEC may grant regulatory reliefs to sandbox participants by modifying or replacing specific licensing, registration, compliance or other regulatory requirements that may otherwise apply, during the sandbox period.

Regulatory sandbox is defined by the SEC as a regulatory tool that will enable a sandbox participant to test its innovative product or service or a new business model in a live and controlled environment, within a defined period.

Sandbox participants that graduated from the regulatory sandbox will then formally submit to the SEC an application for the required license to offer the financial product or service to the public at large.

Last month, the SEC introduced a regulatory sandbox for crypto-asset service providers (CASP) to facilitate responsible innovation and ensure investor protection given the continued growth and development of new crypto-asset services.

The commission issued a notice that opened applications for participation in the SEC Strategic Sandbox (StratBox), which is specifically tailored for CASPs.

The thematic StratBox will focus on entities engaged in or intending to engage in crypto-asset services such as cryptocurrency exchanges, virtual asset custodians and other related service providers.

SEC’s StratBox program for CASPs is aimed at fostering and encouraging responsible innovation within the financial services sector, particularly in the emerging field of crypto-asset services.

It is also designed to provide a controlled and supervised environment where CASPs can test and pilot their products, services and business models.

Further, the program seeks to ensure that innovation is balanced with robust investor protection measures to maintain market integrity and financial stability.