Industry lobby NASSCOM has asked market regulator SEBI to include virtual testing of fintech products in its proposed regulatory sandbox, as some startups may not have the scope for offline testing, reported by Economic Times. Some of the demands made by NASSCOM are: Fintech startups should be allowed to test solutions virtually without entering the actual market. The association has proposed that the limited offline testing should be made optional for the applicants. The testing period should be extended to 12-18 months from the current 9 months, with a maximum of extension of upto 3 month The Payments Council of India has also suggested that regulators proposing similar sandboxes should create a framework to interact with each other. Through this, the NASSCOM is looking to relax SEBI’s “offline testing” feature of the regulatory sandbox, which is a mandatory for eligibility for the fintech startups to apply for the regulatory sandbox, according to the discussion paper. “Before applying for testing in the regulatory sandbox, limited offline testing of the solution should have been carried out by the applicant,” the paper noted. According to NASSCOM, many startups may not have the scope to complete offline testing. What is SEBI’s regulatory sandbox? On May 28, SEBI had released a discussion paper on a regulatory sandbox. The SEBI has proposed two sandbox frameworks, an “innovation sandbox” to be used by fintech startups and entities not regulated by SEBI to test their solutions offline. And a second framework, simply called “regulatory sandbox” for financial institutions…
