Extension of Financial Regulation Sandbox Special Period up to 1 Year and 6 Months from July

Special Period Extended from 4 Years to 5 Years and 6 Months

[Asia Economy Reporter Kim Jin-ho] From July, the special exemption period for the financial regulatory sandbox (innovative financial services) will be extended by up to 1 year and 6 months.

According to financial authorities on the 1st, the amendment to the "Special Act on Financial Innovation Support (Financial Innovation Act)" based on this content will be fully enforced on the 21st.

Currently, the special exemption period for innovative financial services is limited to a maximum of 4 years (2+2). The core of the amendment is to extend the exemption period by an additional 1 year and 6 months in case related laws and regulations are not revised within the period, which could otherwise lead to service suspension.

Additionally, a regulatory improvement request system will be introduced. Innovative financial service providers can request the Financial Services Commission and related administrative agencies to improve relevant regulations up to 3 months before the exemption period expires. If the Financial Services Commission and related administrative agencies accept the request and decide to revise the regulations, the exemption period will be considered not expired until the revision work is completed and implemented.

According to the amendment, innovative financial service providers are expected to offer services more stably without anxiety about the expiration of the period. As innovative financial services become freer from regulations, consumer benefits are also expected to increase accordingly.

The financial regulatory sandbox was first introduced in April 2019 and designated a total of 139 innovative financial services over two years. When designated as innovative financial services, regulations such as licensing and business activities are deferred or exempted, allowing ideas and technologies to be quickly tested and commercialized. Financial innovation accounts for 32% of the government's total 433 regulatory sandbox cases.

Representative cases of the financial regulatory sandbox include the "facial recognition payment service," which allows easy payment by recognizing the face on a machine without taking out a credit card or mobile phone, and services that enable small business owners to join credit card merchant networks remotely.

This content was produced with the assistance of AI translation services.