Overview & Objectives
Building upon the continuous dialogue maintained with market participants and experts since the launch of the Innovation Hub, CyLAS has established its Regulatory Sandbox. CyLAS aims to strike a balance between technological innovation, investor protection, and market integrity. This balance will be achieved through CyLAS’s controlled testing environment, known as the Regulatory Sandbox.
The objectives of the Regulatory Sandbox are as follows:
- To create a transparent cooperation channel between CyLAS and entities developing technology-based solutions in the field of financial services,
- To ensure that the regulatory framework evolves in line with technological developments in financial services.
The CyLAS Regulatory Sandbox is designed for both regulated and unregulated entities. It enables the testing of innovative technological solutions or products related to financial activities under CyLAS’s supervision. The testing of pioneering products, services, and business models within a time-bound controlled environment will enhance CyLAS’s understanding of innovative technologies and facilitate regulatory adaptation to new market developments.
Eligibility Criteria
The CyLAS Regulatory Sandbox welcomes participation from both regulated and unregulated entities engaged in financial innovation activities. Such innovation must relate to a service or product that falls within CyLAS’s regulatory scope.
Unregulated entities may participate through the following means:
- Obtaining prior CyLAS authorization for the regulated services they intend to provide,
- Testing innovative solutions only with entities within the same corporate group or making use of relevant legal exemptions,
- Conducting demo services,
- Entering into a collaboration agreement with a CyLAS-regulated entity.
To clarify, the Sandbox environment is not a “lightly supervised area.” If the innovations offered by unregulated entities involve regulated services, they must obtain the necessary authorization from CyLAS prior to participation.
Additionally, applicants must ensure that their innovative solution meets the following criteria:
- It directly or indirectly facilitates activities within CyLAS’s supervisory remit,
- It represents a genuine innovation in terms of product, service, or business model,
- It demonstrates readiness for testing (i.e., the innovation is sufficiently mature for testing in a production-like environment),
- It provides a benefit to the financial services sector.
