In line with the vision of the Royal Government of Cambodia to innovate financial technology ("FinTech") in Cambodia's non-banking financial services industry, the Non-Banking Financial Services Authority ("NBFSA") issued Prakas No. 037 on FinTech Regulatory Sandbox in Non-Banking Financial Services Sector dated 4 August 2023 ("Prakas"). The Prakas aims to introduce and manage a sandbox environment for FinTech in sectors regulated under NBFSA to test out new products. Regulators currently supervised by NBFSA are required to issue guidelines setting out details in which companies can partake in testing out their FinTech products in the sandbox environment.
In line with the Prakas, on 7 August 2023, the Securities and Exchange Regulator of Cambodia issued Guideline No. 009/23 on the Regulatory Sandbox in Securities Sector ("Guideline"). The Guideline replaces the earlier Guideline No. 001/22.
Under the Prakas and the Guideline, "FinTech Regulatory Sandbox" ("FRS") refers to an environment that allows a company to experiment its new Financial Product and Services ("FPS") with actual customers within a well-defined space and under limited duration, before the official launch and circulation of the product on a larger scale.
In a nutshell, the Prakas imposes obligations on the regulators under the supervision of NBFSA to develop guidelines for an FRS. It also sets out the conditions and requirements for applicants who wish to participate in the FRS. Applicants must be companies duly registered with the Ministry of Commerce in Cambodia.
The Guideline sets out, among others, (i) the formalities and procedures in applying to participate in an FRS in the securities sector; (ii) the evaluation criteria regarding the testing of FPS in a sandbox environment; (iii) the obligations of applicants in various stages of the experiment; and (iv) the disclosure requirements.
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