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    Question

    Which of the following statements correctly defines the

    term ‘Regulatory Sandbox’?
    A Live testing of new products or services in a controlled regulatory environment Correct Answer Incorrect Answer
    B Regulatory framework for sand mining in India Correct Answer Incorrect Answer
    C Regulatory body exclusive for internet-based entities Correct Answer Incorrect Answer
    D Regulatory mechanism for globally operating entities Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    A regulatory sandbox (RS) usually refers to live testing of new products or services in a controlled/test regulatory environment for which regulators may (or may not) permit certain regulatory relaxations for the limited purpose of the testing. It allows the regulator, the innovators, the financial service providers (as potential deployers of the technology) and the customers (as final users) to conduct field tests to collect evidence on the benefits and risks of new financial innovations, while carefully monitoring and containing their risks.

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