The Digital Securities Sandbox (DSS) reshapes how UK financial authorities regulate by allowing firms to test legislative changes in real world scenarios before the changes are implemented.
The DSS could support financial instruments such as equities, corporate and government bonds, money market instruments such as commercial paper and certificate of deposits, units in collective investment undertakings (fund units) and emissions allowances. The trading and settlement of derivative contracts and of ‘unbacked cryptoassets’ such as Bitcoin are not in the scope of the DSS.
„The Bank of England and the Financial Conduct Authority have opened the DSS. We encourage firms that are innovating in financial market infrastructure to apply and have published guidance to help them.” – according to the press release.
„The DSS gives firms the opportunity to explore new technologies in traditional financial markets, for example, distributed ledger technology (DLT), a system for storing and managing information distributed across participants in a network. This technology has the potential to improve efficiency and reduce costs in wholesale markets, benefitting industry and investors. We believe the DSS could also lead to a quicker, more effective and collaborative way of delivering regulatory change.” – the FCA said.
Support for firms
There is a range of support available to firms to help them through the application process. For example, firms can arrange pre-application meetings to better understand the DSS requirements and can find an introductory video on the Bank’s website.
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The DSS is a regulated live environment that has been created to explore how developing technologies could be used by firms to undertake the activities of notary, maintenance and settlement for financial securities either alone, or together with the operation of a trading venue. For example, the DSS will facilitate the issuance, trading and settlement of digital securities in the UK on distributed, programmable ledgers. These activities will need to comply with regulation by the FCA and the Bank.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
