Mayor Establishes D.C. Financial Services Regulatory Sandbox, Innovation Council

District of Columbia Mayor Muriel Bowser recently established the District of Columbia Financial Services Regulatory Sandbox and Innovation Council.

The council is charged with studying and reporting on the feasibility of implementing a financial services regulatory sandbox in the District of Columbia. The council also is called upon to develop a blockchain and innovation regulatory framework to facilitate financial services innovation in the district. If a sandbox is feasible, the council will include with its report legislative, programmatic and policy recommendations for the mayor.

“We want the district on the cutting edge – utilizing the intersection of technology and financial services to benefit our residents and businesses,” said Stephen C. Taylor, commissioner of the District of Columbia Department of Insurance, Securities and Banking, in a department press release. “Washington, D.C., is a creative, tech-savvy city and as we grow, we will continue to explore ways to ensure that the district’s prosperity is inclusive. We will also champion innovation that could improve the availability, accessibility and affordability of financial services for all.”

In 2015, the United Kingdom’s Financial Conduct Authority pioneered the regulatory sandbox as a space for businesses to test innovative products, services, business models and delivery mechanisms without immediately incurring all of the traditional regulatory consequences of engaging in the activity.

In addition to fostering innovation and competition, a sandbox can help district regulators understand how innovative firms are evolving and can adapt regulatory rules, if necessary and appropriate, to better suit the evolving landscape while protecting consumers, according to the release. A sandbox will also allow technology to be used to streamline and innovate the district’s regulatory operations, which could further benefit financial services providers and consumers, the release added.

The membership of the council calls for a cross section of professionals from the insurance, securities, captive insurance and banking industries; consumer representatives; technology industry members; and financial services regulatory professionals. The council will be chaired by the Commissioner for the Department of Insurance, Securities and Banking and includes the district’s chief technology officer.

Mayor Bowser requests that the council reports on its findings within the first six months and regularly reviews the effectiveness of the blockchain and innovation regulatory framework. The council will also review and help administer, if feasible, the regulatory sandbox.

“This initiative has the potential to provide new opportunities for consumers to create, build and protect wealth,” said Commissioner Taylor in the release. “With the department’s regulatory authority of all three major financial industries, we are well positioned to provide a full-service and integrated regulatory sandbox.”

Source: The District of Columbia Department of Insurance, Securities and Banking

Topics Legislation InsurTech Tech