Fintech firm aims to play in sandbox

A financial technology (fintech) company has applied to the Securities and Exchange Commission (SEC) for approval to test an innovative product in the watchdog’s regulatory sandbox.

“A fintech firm engaged in the private fund business has submitted an application to join our sandbox and three or four other fintech startups have also expressed interest,” said Archari Suppiroj, director of the fintech department at the SEC.

The regulator, which envisions the regulatory sandbox for private funds and investment advisory services, expects the scheme to begin in the first half of this year.

Ms Archari said the sandbox will begin after fintech companies complete their applications and their products and services are available for participating investors to test out.

Eligible sandbox participants must be Thai-registered companies that have won approval from the regulator. Retail investors will be barred from taking part in order to minimise risk.

The fintech firms will be limited to testing out their products in the sandbox for up to one year, which is sufficient time for the SEC to learn from them and ultimately draft laws governing related products.

Apart from the SEC, the Bank of Thailand and the Office of Insurance Commission (OIC) plan to launch their own regulatory sandboxes and set up a joint working group to coordinate their efforts in the event that the products and services of some fintech firms are being supervised by more than one regulator.

The SEC will oversee fintech firms engaged in the capital market, the Bank of Thailand will supervise those involved in the financial market, and the OIC will be responsible for those in the insurance business.

Buncha Manoonkunchai, the central bank’s senior director of the financial technology department, said dozens of standalone fintech companies and financial institutions have shown interest in testing the central bank’s regulatory sandbox and are consulting with policymakers.

“These companies are in various stages, from pitching ideas to product development, and they are working closely with the Bank of Thailand,” Mr Buncha said.

The central bank has set up a “fintech clinic” through which companies can consult with the bank on various matters to prepare for testing products or services in the sandbox. The clinic is held on Mondays and Wednesdays.

The sandbox is a safe space where banks and non-bank players can test and conduct fintech trials while ensuring that consumers are not exposed to risks.