What is sandbox? Explain why it is often mentioned in the context of financial technologies companies? Also explain its importance in Indian economy.

Structure of answer:

  • Introduction (Discuss about SEBI).
  • Objective of Sandbox.
  • Why sand box is important in Indian economy?
  • Way forward.
  • Conclusion.

Key points:

  • A live, testing environment where new products, processes, services and business models could be deployed on a limited set of eligible customers for a specified period of time, with certain relaxations in the regulations and guidelines.
  • The sandbox is intended to serve as a testing ground for new business models and technologies that benefit the investors, Indian markets and the Indian economy at large.
  • To begin with, all market participants that are registered with the SEBI will be eligible to test within the sandbox.
  • At a later stage, SEBI may allow sandbox access to fintech start-ups and other fintech firms as well.
  • To be eligible to be tested in the sandbox, a solution need to show that it directly benefits the investors and poses no risks to the financial markets among other parameters.
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