Blog : Who wants to build a sandcastle?

With the weather warming up, and our thoughts turning to blue skies, azure seas and chilled drinks by a Mediterranean pool we were pleased to see a press release from the FCA that they were introducing a sandbox.  Imagining that they were going to convert Canada Square into a beach in a similar way as Paris converts much of the Seine’s right bank in its annual Paris Plages event, we were half way to the door heading for the Jubilee Line – sun tan lotion in one hand, bucket and spade in the other – when someone in the office actually bothered to read the whole release.

No, not a beach. In fact, no sand at all.  Not even a pebble. Instead it’s a world’s first for a financial services regulator – a ‘testing’ environment in which businesses can test ideas about new financial products & services within a safe space to ensure that consumers can be protected. The regulatory sandbox is part of Project Innovate which aims to encourage innovation within the UK’s financial markets and provides firms with an easier, more cost-effective, route than having to go through the full, time-consuming, authorisation process.  Firms will still need to be authorised but only for the limited purposes of the sandbox.

Hurrah, I hear you say.  And yes, it is a sensible alternative to the often Draconian processes some firms have to go through to enter the UK’s financial sector, but it did get me wondering.  With its general  ‘comply and explain’ approach to firms, isn’t it also rather incongruous?

As someone said, ““if they can’t state prescriptively what is required on an existing rule or product, how are they going to comment on something completely new?  Would you launch a new product on a shrug of a shoulder and ‘see how it goes, else you’ll have to explain why’ type response?”


Fair point.  I’m sure that the sandbox is a good idea, and innovative, exciting, new things will emerge from it, but no one can blame us for being a little sceptical. In the meantime, I’m off to Paris to the beach.  And, if it’s raining, then at least I can watch the Euros!


  • 26 May, 2016
  • Quinapalus
  • FCA,

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