Nasscom asks Sebi to ease norms for offline testing of fintechs

Technology industry association Nasscom has proposed that special provisions for virtual testing of fintech products be created in the capital market regulator’s proposed regulatory sandbox, as some startups may not have the scope to test their products offline. 

The Securities and Exchange Board of India had on May 28 introduced a discussion paper on a regulatory sandbox and invited suggestions for the framework. The objective of the move is to use fintech as an instrument to improve the fairness and transparency of the securities market ecosystem, according to Sebi. 

In the eligibility criteria to enter the sandbox, Sebi has mandated “limited offline testing” by the applicants, a condition that Nasscom wants it to relax. There are situations when a test environment does not exist or is a barrier in terms of entry into the sandbox, the lobby group said in its submission on the proposed framework. “Most of the fintech companies, especially the startups, do not have scope for offline testing of solutions before entering or applying for the sandbox,” the industry body said. 

It proposed that the requirement of limited offline testing be made optional for applicants. “There should be a provision for participant firms to test their solutions virtually without entering the real market, if needed,” it suggested. 

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