#1Bank of Papua New Guinea Copyright BPNG The BPNG Regulatory Sandbox Overview November 2019#2Agenda What is a Regulatory Sandbox? • Why BPNG? • Why Sandbox? Application Methodology Application Life Cycle Documentation Available Q&A Copyright BPNG#33 What is a Regulatory Sandbox? A designated environment to build (almost) anything you want... A safe environment, with clear boundaries & safeguards as long as it is innovative and adds to PNG growth We may relax some (but not all) our rules Copyright BPNG Consequences of failure can be discovered and, as a result, contained 3#4Copyright BPNG & Why BPNG? Our goal is Financial Inclusion for all PNG citizens And to use new technologies to promote development and growth Innovation has the potential to lower fees & charges Makes PNG more attractive for innovators & investors Provides a testing ground for existing regulations and for ensuring fit-for-purpose regulation Allows us to begin to understand the issues & pitfalls of new technologies and new business models#5UNKNOWNS Risks Benefits Business Model Product Technology Copyright BPNG Service Innovation Why Sandbox? Test Assist Observe Maximise Benefits Innovation Minimise Risks Review Feedback • • • • • . Rule-Based KYC/e-KYC Sanctions Prohibition Risk Management Licensing Provisioning Consumer Protection Reporting •Cyber Security . • Ownership Digital/Trusted Identity Regulations#63 Application Methodology Scope Criteria Deployment Innovation P Based Fairness R C Process R Exit Need N Strategy C T Equality Proportionality பப Sample Criteria R Testing Regulatory Compliance L E Forward A Transparency S Looking Reporting Copyright BPNG Research Risk Management Due Diligence#7Application Life Cycle Pre-Application Q&A Application Evaluation Sandbox Trial ? Suitable ? Accepted HO Unsuitable Applicant Not Accepted Failed Copyright BPNG Trial Extended Normal BPNG Processes & Approvals .Կ-ՈՒ Deploy to Market 7#8Sandbox - Some Answers Who Own/Regulates the Sandbox? - Bank of Papua New Guinea Who Uses it? - - Authorised Financial Institutions who are: • Active in PNG Subject to BPNG Regulations Meet BPNG Sandbox Principles Innovators with solution that are deemed to: Require a Licence Require BPNG Approval • Accelerate Financial Inclusion - FinTech Developers working on Fl-related Solutions or that represent new FI or PGK Opportunities Copyright BPNG#9Copyright BPNG € Sandbox - Some Answers Q: Why Use it? - - - Potential relief from otherwise innovation-restricting regulations Access to other markets who accept the quality of the BPNG Sandbox process Ability to test with real customers using real data in a safe and secure environment Q: What will it Cost to Enter? - Nothing - the process is free to qualifying applicants Q: How to we find our More? Watch for application forms and information packs to be posted on BPNG website#10Documentation Available Overview Presentation Sandbox Instructions and Application Form Sandbox Launch Notification Press Release Copyright BPNG#11Questions Answers 11