CBO Fintech Regulatory Sandbox
Frequently Asked Questions
What is a Fintech Regulatory Sandbox?
A Fintech Regulatory Sandbox refers to the live testing of innovative financial products or services and/or innovative ways of presenting existing financial products or services in a controlled/test regulatory environment for which regulators permit certain regulatory relaxations for the limited purpose of the live testing. A Regulatory Sandbox allows the regulator, innovators, financial service providers and customers (as final users) to conduct field tests in an off-market development environment and collect evidence on the benefits and risks of new financial innovations, while carefully monitoring and containing their risks. It is an important tool that enables more dynamic evidence-based regulatory environments which learn from, and evolve with, emerging technologies.
What is the first step of entering the Fintech Regulatory Sandbox?
If you are interested in testing your Fintech solution in the FRS environment, please thoroughly read the FRS Framework. By reading the framework ( https://cbo.gov.om/Pages/Fintech.aspx), you will be able to evaluate the readiness of your Fintech solution and its eligibility to enter the FRS against the given eligibility criteria and testing expectations. If you do not have further doubts, you may proceed to apply using the posted application form ( https://cbo.gov.om/Pages/Fintech.aspx).
Is there a specific period that the FRS is open for application?
Applications for the CBO FRS are accepted on a rolling basis and are announced on CBO social media accounts. CBO FRS launched three cohorts starting from 2020 promoting innovation and competition in the financial sector by supporting innovation in the digital payments marketplace, Trade Finance marketplace utilizing Distributed Ledger Technology/Blockchain and Digital Lending marketplace.
There are already regulations available for my proposition; can I still apply to the Regulatory Sandbox?
The Regulatory Sandbox is exclusive for new business models/concept where no regulatory framework or licensing requirements exist. If there is already an existing path to licensing, then applications would not be accepted.
Do I have to be based in Oman to apply?
You have to be a company that is registered in the Sultanate through the Ministry of Commerce, Industry and Investment Promotion with a valid Commercial Registration. A foreign company that is not based in Oman and does not have any activities here must therefore obtain a Commercial Registration in order to apply to the FRS.
What formal documents do I need for a complete application?
A Commercial Registration and fit & proper criteria documents. All other documents required are specified in the Application Form. In addition, applicants must include any other documentation they believe is relevant.
How long does the application process take?
The duration of the
application process depends on each application, its readiness, needed
set-up/accommodation as well as the CBO's inquiries and further
documents/arrangements needed, which shall be communicated to the applicant
after receiving the comprehensive proposal and after granting them an in-principle
approval. The full timeline of the application process is specified in the FRS
Framework ( https://cbo.gov.om/Pages/Fintech.aspx).
Can I make changes to the FRS application already submitted after submission to CBO?
Yes, you can. However, changes should not be major and not too many as this may delay the approval process for your application and others, too.
If my application is rejected, how and when can I re-apply?
Rejected applicants may re-apply using enhanced applications after understanding the reasons of rejection. However, the CBO may consider and process the new application whenever fit according to priorities of other applications to the FRS.
Once my application is approved for entering the Sandbox, can I launch my products and services in the market?
No, the applicant needs to pass stage 1 in order to commence operations with live customers and data.
My company and Fintech solution are already part of another incubator program. Can I still apply for FRS testing?
The eligibility criteria for application and entrance to the CBO FRS outline a Fintech solution that is almost a ready product with main measures to already be in place (financial resources, human resources, customer data safeguards, AML & CFT measures etc.), while most solutions in incubator environments are at not this stage of readiness. However, if your incubated Fintech solution is almost ready, you may proceed to applying to the CBO FRS.
How long is the live testing period?
The minimum duration of the testing period is six months for all Fintech solutions. FRS participants may apply for an extension, which will be subject to approval by the CBO. However, there is no specified maximum duration, as this will be agreed upon between the applicant/participant and the CBO.
Will I have access to any customer data in an open manner during testing?
The CBO will not provide any customer data (whether real or dummy) available to participant companies testing their Fintech solution in the FRS program. As testing will be on real customers, participant companies will have direct access to volunteer customers' information, however, all specified standards of customer information protection must be upheld by the company.
Are there any restrictions on the nationality of volunteer customers participating in the FRS testing?
No, however, the CBO prefers Omanis and residents in the Sultanate as volunteer customers (those with an economic interest of more than one year in the Sultanate). This preference is due to the condition that CBO expects the Fintech solution to be deployed in Oman after a successful live testing and licensing process. Please refer to the eligibility criteria mentioned in the FRS Framework for further information.
Can I make changes to my Fintech solution during live testing?
FRS participants should aim to stick to the original features of their product/service as per the application and approval received from CBO. For any additional features and/or amendments during live testing, the FRS participants must seek approval from CBO and specify if a re-test is required. When such changes are made, the Fintech participant must notify the volunteer customers taking part in the live testing at least 14 days before implementing those changes and should communicate all relevant options to customers.
What types of accommodation will the CBO offer to FRS participants?
The CBO will only provide regulatory accommodation to companies testing their Fintech solution in the FRS program. Financial, physical, technological accommodations are therefore not part of FRS accommodations as the FRS is not a business incubator.
Will FRS participants be testing their Fintech solution in an unregulated environment?
No, those companies will be granted a temporary approval to test their Fintech solution governed by all CBO mandated regulatory requirements but with one or few regulatory exemptions for the sake of live testing.
Will CBO consider exempting a Fintech solution successfully tested under the FRS from licensing?
No, a successfully tested Fintech will not be automatically granted neither a full license from CBO upon exit of the FRS, nor from full licensing beyond the specified testing period. The FRS taskforce produces recommendations to licensing departments with evaluation based on the FRS participant's live testing experience, which will expedite the full-licensing process of the company's activities. The FRS taskforce will also produce recommendations concerning amendments, enhancements and introduction of accommodative regulations that can be implemented by the CBO, based on companies' FRS live testing experiences.
What if I am unable to comply with all regulatory requirements needed for a full license after my Fintech solution was successfully tested in the FRS?
FRS participants are expected to have a rigorous and realistic plan for meeting those licensing and regulatory requirements as the FRS testing period is limited and they may not operate beyond it without a full license from CBO. In cases where regulations pertaining to the Fintech solution are not in place, the CBO may work on developing and introducing those regulations.
Is the full-deployment of the Fintech solution limited to the Sultanate after a successful testing?
No, companies may apply their Fintech solution anywhere they see fit and feasible. However, for them to enter the FRS, the Fintech solution must be eligible for deployment in Oman.