The Bank of Lithuania (Lietuvos Bankas), the country's central bank and financial regulator, has officially launched its regulatory sandbox and issued its Regulatory Sandbox Framework, accepting applications to the sandbox to commence on October 15, 2018. A regulatory sandbox is a 'novel framework allowing innovators, under the oversight of a regulator, to conduct small-scale short-term testing of their innovations, using live participants, in a closed, safeguarded and bounded environment under relaxed regulatory conditions.'
The objectives and eligibility requirements are stated on the sandbox home page:
- Genuine innovation. Financial services, products or business models new to Lithuania’s market.
- Consumer benefit. Innovation which brings societal benefits such as convenience, safety, cost reduction of financial services or other benefits to the financial market.
- Must show a need for testing in a live environment. The sandbox provides a critical real world perspective on the potential impact of an innovation in a safe, bounded, limited testing space.
- Ready to begin testing. The applicant must be pre prepared and conducted proper due diligence and preparadeness as woudl be expected, including being able to afford the testing experience.
- Deployment services in Lithuania. Financial services, products or business models, tested in the regulatory sandbox are intended to be deployed domestically.
Lithuania's sandbox framework, to be reviewed biannually, will provide for the safe testing of innovative financial or insurance solutions, including the issuance of securities in the sandbox for a duration of six months with the potential for renewal.
The central bank appears to promote greater transparency to the public with its sandbox, pledging to publish on its website information related to 'decisions to allow financial market participants to enter the regulatory sandbox, the end of any activity in the regulatory sandbox' including a detailed summary.