Regulatory sandbox in FinTech?

The platform market, or rather the digital platform, is a challenge not only for traditional business models, but also for legislators who, operating in a regulatory vacuum, have to ask themselves about the relationship between technology and the rules in this sector. On this subject, which has also been addressed by the European Court of Justice in the Uber case, European institutions seem to have adopted an approach based on which legislation on Fintech should follow the principle of “same services and same risks” : the same rules should apply, regardless of the legal entity concerned or its location in the Union, and comply with key principles such as proportionality in relation to risk and technological neutrality. The questions of “how to regulate” (extending the current European rules according to an activity-based approach) and “why” (with which objectives) remain, however, at the centre of the European debate, since it is highly likely that the new financial services based on extensive use of technology may remain outside the current activity-based European regulatory framework and therefore remain regulated at the level of individual Member States. In this regard, the European Commission’s 2018 Fintech Action Plan called “for a European strategy for the creation of a single technological market for financial services”. The Action Plan, among the possible tools to address the challenges of regulating Fintech, suggested the use of “innovation facilitators” and in particular the regulatory sandbox. To this end, a mandate was given to the Joint Committee of the European Supervisory Authorities (ESAs) to draft a comparative survey of innovation facilitators in Europe, together with the development of best pratices for their constitution and use. The ESAs report, published on January 7, 2019, demonstrates how the number of innovation facilitators has grown rapidly in recent years. Precisely because international collaboration is the “key element” for the success of the regulatory sandbox, the ESAs propose to create a network of facilitators, in which all competent European Authorities can participate. Moreover, on June 27, 2019, the Italian Senate approved the Decree Law 34/2019, containing a proposal to establish a regulatory sandbox in Italy to provide a time-limited and protected regulatory space for the development and testing of innovative financial products and services before offering them on the market.