Four Brazilian financial authorities (Special Finance Secretariat of the Ministry of Economy, Central Bank of Brazil, Securities Commission and Superintendency of Private Insurance) announced the intention to implement a regulatory sandbox model in Brazil.
The initiative comes as a response to the transformation that has been taking place in the financial, capital and insurance segments. The use of innovative technologies, such as distributed ledger technology (DLT), blockchain, robo-advisors and artificial intelligence, has allowed the emergence of new business models, reflecting the offer of products and services of higher quality and scope.
This scenario imposes on regulators the challenge of acting with the necessary flexibility, within the limits allowed by legislation, to adapt their regulations to technological changes and constant innovations, so that regulated activities maintain compliance with the rules of each segment, regardless of the form how services and products are delivered, especially under the prospects of legal certainty, customer and investor protection and the safety, health and efficiency of markets.
The regulators who subscribe to this communiqué will coordinate their institutional activities to discipline the functioning of essential elements of the sandbox in their corresponding spheres of competence, contemplating elements common to the models observed in other jurisdictions, such as the granting of temporary authorizations and the exemption, exceptional and justified , of compliance with rules for specific regulated activities, observing previously established criteria, limits and periods. Regulators, in addition, will seek to act jointly whenever the activities go through more than one regulated market.
It is hoped that the implementation of this regulatory regime will be able to promote the development of products and services that are more inclusive and of higher quality and that can foster constant innovation in the financial, security and capital markets.