Regulator coherence, capacity, and collaboration: applying lessons from Canada and the UK for fintech regulatory sandboxes

ABSTRACT This paper studies the fintech regulatory sandbox initiatives by the Canadian Securities Administrators and the UK's Financial Conduct Authority and explores the critical success factors revealed by those initiatives and how they might implicate other similar initiatives in Canada, and particularly considering the specific Canadian constitutional federalism. The analysis draws lessons from the two sandboxes for regulatory success and strength in regulating sandboxes for financial technologies and argues that regulatory coherence, capacity, and collaboration are indispensable to fintech regulatory sandboxes because incorporating them in the design and implementation of fintech sandboxes would engender regulator success at supporting fintech innovation within safe guardrails. We also rely on the lesson learned from the two initiatives from studies published by the regulators themselves as well as by other scholars who have undertaken studies of these and other sandboxes. Examining these lessons helps guide the development of further regulatory sandboxes for fintech in Canada and for other technologies.