The FCA CEO, Nikhil Rathi, delivered a speech on financial innovation during FinTech Week.
Mr. Rathi talked about how regulatory open-mindedness had enabled the success in financial innovation. The FCA introduced Project Innovate in the first year of its existence to stay close to innovative firms and provide additional regulatory support where needed.
Mr. Rathi also discussed the challenge of balancing two of its objectives: promoting competition and consumer protection.
As part of this balancing act, the FCA will be taking forward the Kalifa Review’s recommendation for a scale box to provide additional support to growth-stage FinTechs.
Mr. Rathi discussed the creation of a regulatory nursery and noted that, currently, newly authorized firms are treated in the same way as those with a long track record. The regulatory nursery will create a period of enhanced oversight for newly authorized firms, helping them to develop and become accustomed to their regulatory status. The regulatory nursery will keep firms in close contact with FCA post-authorization, providing them with support and steering them in the right direction.
In addition, the FCA will soon permit year-round applications for the sandbox, which allows firms to safely test their innovative ideas before they reach the market, without risk to consumers or markets. The FCA will better advertise the support it already offers to firms that are looking to build out their innovative offering. The FCA will also refine the digital sandbox and focus specifically on sustainability.
The full speech is available here.