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Global Research on Financial Hubs ④|How Guangdong can balance financial regulation and innovation

2018-May-11       Source: Newsgd.com

“Financial regulation should not be absent, neither be over-applied. It should be controlled to an appropriate level.” summarized Dr. Pei Sai Fan, visiting professor of Nanyang Technological University of Singapore and former Director of the Monetary Authority of Singapore (MAS) Academy. This is what he proposed to Guangdong on financial regulation with the aim of boosting high-quality economic development.

Dr. Pei Sai Fan, visiting professor of Nanyang Technological University of Singapore and former Director of the Monetary Authority of Singapore (MAS) Academy.(Source: Nanfang Plus)

Regulatory Sandbox, a new trend in financial regulation

In recent years, fin-tech companies have sprung up all around the world, providing more convenience to the public through new technology and ideas. However, most of them are not in line with current credit regulations. So, how can those companies be financially supported while carefully avoiding risks?

This is where the global experimental Regulatory Sandbox, initiated in the UK in 2015 and rapidly adopted by other key countries.

According to the Financial Conduct Authority (FCA) in UK, the regulatory sandbox aims to create a “safe space” in which start-ups, entrepreneurs, and even established companies can launch products on a limited, temporary scale to consumers to test innovative products, services, business models, and delivery mechanisms in the real market without incurring the regulatory costs and burdens that would otherwise be imposed.

At present, the UK, Singapore, Australia, the US, France, Germany and other countries are running this model and have drawn valuable lessons from it. Lar year (2017), Beijing had planned to experiment with the model for the first time in China.

Dr. Pei suggested that since Guangdong is strong in technological innovation, the province could take the widely-accepted Regulatory Sandbox experiment and explore a suitable way to boost FinTech development.

Editor: Nan

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