Financial services and fintech regulatory sandbox

Important dates

Intake status: Accepting applications starting July 4, 2022

Overview

The regulatory sandbox, established by the Financial Innovation Act, supports financial innovation and attracts new investment in the financial and financial technology (fintech) sectors.

Approved participants will get a certificate of acceptance allowing them to be temporarily exempted from some laws and regulations and setting out terms and conditions for their participation in the sandbox.

A regulatory sandbox is a “safe space” in which companies can test innovative products or services, without immediately meeting all regulatory requirements. It also assists companies in collecting information on new products and services to determine if they have value for customers.

Alberta is the first province in Canada to establish a regulatory sandbox for the finance and fintech sectors, giving them new ways to build their business and create jobs. The province is also a growing destination for financial services and financial technology companies, and a regulatory sandbox increases our standing in this part of the global economy.

How it works

Approved participants will receive a certificate of acceptance allowing them to be temporarily exempted from some laws and regulations and setting out terms and conditions for their participation in the sandbox.

Approved participants may be temporarily exempt from some requirements set out in each of the following Acts, and regulations under these Acts:

Loan and Trust Corporations Act
Credit Union Act
ATB Financial Act
Consumer Protection Act
Financial Consumers Act
Personal Information Protection Act

Each sandbox participant will have to follow specific terms and conditions to protect consumers. Public information about sandbox participants will be published online.

The regulatory sandbox does not include exemptions to securities laws, including the Alberta Securities Act. The CSA Regulatory Sandbox is an initiative of the Canadian Securities Administrators to support fintech businesses seeking to offer innovative products, services and applications in Canada.

Information on how to participate will be available when applications open July 4, 2022.

Eligibility

To participate in the regulatory sandbox, companies will have to meet each of the following criteria, set out in the Financial Innovation Act:

Physical presence requirement: Applicants will be required to maintain a physical presence in Alberta. This means applicants must have an office in Alberta or senior staff living in Alberta.
Financial services requirement: The regulatory sandbox is designed for companies that offer financial products or services that fall under the legislation listed above.
Innovation requirement: Applicants must adequately explain how each eligible product or service is considered to be new and original in the Alberta marketplace, or a new adaptation or material improvement of another product or service. Applicants will not receive exemptions for products or services that are offered in Alberta by other companies.
Business plan requirement: Applicants must provide a sound and viable business plan, including details for testing their financial product or service and plans to exit the regulatory sandbox.

The Minister of Finance may also require applicants to provide additional information as necessary.

Conditions and requirements

The Minister of Finance may impose terms, conditions or restrictions on a company’s certificate of acceptance. Terms, conditions and restrictions ensure a company has proper oversight and is not taking on any undue risk for itself, its customers or the broader financial sector.

The Minister of Finance may impose terms, conditions or restrictions on a company’s certificate of acceptance. Terms, conditions and restrictions ensure a company has proper oversight and is not taking on any undue risk for itself, its customers or the broader financial sector.

Terms, conditions and restrictions may include requirements to:
- consult a qualified expert or auditor
- limit the number of customers who can purchase the product or service being tested
- have an appropriate amount of capital to support the venture
- provide proof of appropriate insurance coverage
- implement specific financial security or surety requirements to mitigate risk and losses
- implement risk management policies and procedures
- maintain a consumer complaint mechanism that allows consumers to resolve concerns
The Minister of Finance may amend the terms, conditions and restrictions that appear on a company’s certificate of acceptance, including adding new terms or removing existing ones.
Sandbox participants will be required to provide the following information to consumers:
- the name and a description of the sandbox participant
- that the sandbox participant has been issued a certificate of acceptance under this Act and the expiry date of the certificate of acceptance
- a description of the financial product or service being offered in the regulatory sandbox
- a description of the regulatory sandbox framework
- any legislative exemptions provided to the sandbox participant
- any terms, conditions and restrictions on the sandbox participant’s certificate of acceptance
- contact information for the sandbox participant and the relevant office of the Government of Alberta for the purpose of filing a consumer complaint
- if a sandbox participant’s certificate of acceptance has been revoked or cancelled
- any other information that, in the opinion of the Minister of Finance, is reasonable to require
Sandbox participants will be required to submit an annual return to the Alberta government for each year they participate in the regulatory sandbox, and for the year following their time spent in the regulatory sandbox. Annual returns are already a common requirement for corporations under the Business Corporations Act. Annual returns typically provide key corporate information, including office address, director information and financial statements.

This will help us monitor the regulatory sandbox’s impact while also ensuring participants are operating safely and responsibly.

Sandbox participants will also be required to maintain corporate and financial records. The Minister of Finance may appoint someone to conduct an examination of a sandbox participant (or its corporate partners, if applicable). The Minister of Finance has discretion in determining who the examiner should be.

Public information

Information about each sandbox participant will be posted on alberta.ca, including:

the name of each sandbox participant issued a certificate of acceptance
a description of the product or service each sandbox participant is offering through the regulatory sandbox
a list of regulatory exemptions provided to each sandbox participant
any terms, conditions or restrictions imposed by the Minister of Finance on a sandbox participant
the expiry date (including any extension) of each participant’s certificate of acceptance
any amendment, revocation or cancellation of a certificate of acceptance

We will publish the information above after a certificate of acceptance is issued or has been amended for a sandbox participant. The information will remain online for one year after the time spent by the regulatory sandbox participant has ended.

Next steps

We will start to accept applications to participate in the regulatory sandbox on July 4, 2022.

For more information about the regulatory sandbox and the application process, email Financial.Sandbox@gov.ab.ca.

The personal information collected through Alberta’s Regulatory Sandbox site may be used for the purpose of providing you with emails and updates on inquiries and submissions.

This personal information collection is authorized under section 33(c) of the Freedom of Information and Protection of Privacy (FOIP) Act.

If you have any questions about this collection of personal information, you may contact the Regulatory Sandbox Secretariat at 780-644-5006, financial.sandbox@gov.ab.ca or you may write to:

Regulatory Sandbox Secretariat
8th Floor
Regulatory Sandbox, C/O Financial Institutions and Markets Policy and Regulation
9820 107 Street NW
Edmonton, Alberta T5K 1E7

News

New legislation spurs innovation in finance sector (March 30, 2022)

Contact

Connect with the Regulatory Sandbox Secretariat:
Hours: 8:15 am to 4:30 pm (open Monday to Friday, closed statutory holidays)
Phone: 780-427-5064
Toll free: 310-0000 before the phone number (in Alberta)
Fax: 780-427-0780
Email: financial.sandbox@gov.ab.ca

8th Floor
Regulatory Sandbox, C/O Financial Institutions and Markets Policy and Regulation
9820 107 Street NW
Edmonton, Alberta T5K 1E7

Popular topics:

Financial services and fintech regulatory sandbox

Overview

How it works

Eligibility

Conditions and requirements

Public information

Next steps

News

Contact

Tell us more about your experience

Overview

How it works

Eligibility

Conditions and requirements

Terms, conditions and restrictions

Consumer information requirements

Oversight and annual returns

Public information

Next steps

News

Contact

Tell us more about your experience