FCA accepts 29 businesses into cohort 5 of its regulatory sandbox

Maria Nikolova

The list of approved projects includes a test that will integrate DLT within LSEG-operated listing and trading venues to test market infrastructure for the issuance of equity securities, evidencing the change of beneficial ownership.

The UK Financial Conduct Authority (FCA) has earlier today provided an update on the progress of its regulatory sandbox.

The FCA says that a total of 29 businesses have been accepted into cohort 5 of the regulatory sandbox to test innovative products, services, business models and delivery mechanisms.

The regulator received 99 applications to cohort 5 of the regulatory sandbox – the largest number of applications it has received to date. Applications came from firms operating in the UK and overseas. The majority of applications came from firms looking to operate in the wholesale and retail banking sectors.

Examples of propositions that have been accepted include digital identity solutions, platforms which tokenise issuance of financial instruments, and services aimed at facilitating greater access to financial services for vulnerable consumers.

Tests will be conducted on a short-term and small-scale basis. The FCA works closely with each firm to agree testing parameters and build in appropriate consumer safeguards.

Let’s recall that more than 40% of companies accepted to cohort four are using distributed ledger technologies (DLT). Of these, six are using DLT to automate the issuance of debt or equity. Two are using DLT to support the provision of insurance. Other technology applied includes geo-location technology, use of Application Programming Interfaces (APIs) and artificial intelligence.

Alike cohort four, cohort five also includes a number of firms willing to conduct DLT-related experiments. The list of such companies includes London Stock Exchange Group. A test will integrate DLT within LSEG-operated listing and trading venues to test market infrastructure for the issuance, admission and trading of equity securities, evidencing the change of beneficial ownership. LSEG has invited Nivaura and select market practitioners along the value chain to participate as part of this test.

Another interesting fintech project has been proposed by Standard Chartered. The project involves an application that uses tokenisation to facilitate the issuance of retail bank deposits that are backed by FSCS protected fiat funds. The aim is to enable consumers to receive economic benefits from longer-tenor deposits while maintaining flexible and easy access to their deposited money.

Another of the approved projects comes from Digital Wealth Solutions. The initiative focuses on a digital platform for financial advice firms to support the provision of regulated advice and an ongoing service to clients. The platform complements the traditional face-to-face approach and aims to improve adviser production, moderate the cost of providing advice and increase access to advice.

Read this next

Retail FX

Italian watchdog red flags Olympus Brokers, UnicoFX and Allfina Group

Italy’s Commissione Nazionale per le Società e la Borsa (CONSOB) has shut down new websites in an ongoing clampdown against firms it accuses of illegally promoting investment products in the country.

Retail FX

XTB revenues hits zł1.45 billion in 2022, Q4 earnings disappoint

Poland-based Forex and CFDs broker, XTB has reported its final results for Q4 of 2022 and the full fiscal year ending on December 31, 2022, showing one of its most successful corporate years.

Executive Moves

Lirunex Limited recruits Waleed Salah as head of MENA sales

Maldives-based brokerage firm Lirunex Limited has secured the services of Waleed Salah, who joined the company in the role of its head of sales for the MENA region.

Executive Moves

Trading 212 parts ways with co-founder Borislav Nedialkov

Trading 212 has a void to fill at its FCA-regulated business in London, following the departure of two key players, Raj Somal and Borislav Nedialkov.

Digital Assets

Binance acquires troubled crypto exchange GOPAX

Binance, the world’s largest digital asset trading platform, has reportedly acquired a majority stake in the troubled South Korea-based cryptocurrency exchange GOPAX.

Digital Assets

Kraken exits Middle East, closes UAE office

Digital currency exchange Kraken will close down its operations in Abu Dhabi, UAE and lay off the majority of its team focused on the Middle East and North Africa.

Industry News

CFTC comments on ION Cleared Derivatives issues after Russian-linked hack

“The ongoing issue is impacting some clearing members’ ability to provide the CFTC with timely and accurate data. As this incident unfolded, it became clear that the submission of data that is required by registrants will be delayed until the trading issues are resolved.”

Industry News

FCA took down 14 times more misleading ads in 2022 thanks to technology

The FCA has made significant improvements to the digital tools it uses to find problem firms and misleading adverts. These improvements have enabled it to work through a much larger number of cases compared with 2021.

Executive Moves

HKEX appoints ex-Goldman Sachs Matthew Cheong to lead platform’s focus on derivatives

“He has worked for a number of the world’s leading investment banks and his experience will be invaluable to HKEX as we continue to enhance our derivatives product offerings and build on our innovative and robust platform business, connecting capital with opportunities.”