According to the provisions of the National Development Plan 2018 – 2022, which set forth the possibility of creating companies dedicated to implementing innovative technological developments and obtaining a certificate to operate temporarily in order to carry out activities typically performed by financial entities under the supervision of the Financial Superintendence of Colombia, the National Government issued Decree 1234 of 2020, through which it regulates the objectives, requirements and stages of operation of the controlled test space (sandbox), in order to, promote innovation in the provision of financial services and at the same time, facilitate the identification of new financial developments for supervisory and regulatory authorities.
The controlled test space (sandbox) is a tool that allows interested entities temporarily to test innovative technological developments in the provision of services and activities of financial institutions under the supervision of the Financial Superintendence of Colombia. The aforementioned regulation sets forth the objectives that each technological development must meet, always keeping in mind the goal of innovation in the provision of financial services and products, safeguarding in every case the integrity and stability of the financial system and ensuring the protection of the interests of financial consumers.
In order to join the controlled test space, it must be demonstrated that the development, either, seeks to increase efficiency in the provision of financial services or products, solve a problem for financial consumers, promote financial inclusion, improve the compliance regulatory framework, develop financial markets or improve their competitiveness, as well as that it is sufficiently advanced and ready to be tested and that financial services will be provided exclusively in Colombia.
The Superintendence of Colombia is in charge of defining the requirements that the interested parties must meet for the filing of the application to enter the controlled test space. Likewise, it will be in charge of reviewing the applications and issuing, in case of finding the requirements fulfilled, the certificate of temporary operation, which is deemed to be the starting point to run the tests and in no case will supersede an initial term of two (2) years. The Financial Superintendence of Colombia will exercise the inspection, surveillance and control of the participants of the controlled test space at every stage.
Each analysis carried out by the Financial Superintendence regarding the procedures and requests related to the controlled test space will be subject to a principle of proportionality, which will vary according to the risks and conditions of each proposed technological development.
Finally, the law sets forth the different options that are presented after the end of the temporary operation certificate, either, the transition to the license of a regulated financial, stock market or insurance company and its corresponding plan of adjustment to the activity or its dismantling, and the procedures to be followed in any of the two (2) cases.