In a bid to support the fintech industry in, the Reserve Bank of India introduced a regulatory sandbox for the startups to test their products and services. Now a similar initiative has been taken by market regulator Securities and Exchange Board of India (SEBI) and insurance regulator Insurance Regulatory and Development Authority of India (IRDAI).\r\n\r\nSEBI released its framework for innovation sandbox on May 20 with an aim to create an ecosystem which promotes innovation in the securities market.\r\n\r\nIn its circular SEBI said that fintech companies should \u00a0have access to market\u00a0related data, \u00a0particularly, trading and holding data, which is otherwise not readily available to them, to enable them to test their innovations effectively before the introduction of such innovations in a live environment.\r\n\r\n\u201cSEBI \u00a0is proposing \u00a0an \u201cInnovation Sandbox\u201d, which would be a testing environment where FinTech firms and entities not regulated by SEBI including individuals may use\u00a0the environment for offline testing of their proposed solutions in isolation from the live market, subject to fulfilment of the eligibility criteria, based on market-related data made available by Stock \u00a0Exchanges, Depositories and Qualified Registrar and Share Transfer Agents (QRTAs),\u201d the circular noted.\r\n\r\nIn order to boost the insurance sector in India, a similar proposal had been introduced by IRDAI on May 18. It proposed to set up a regulator sandbox to foster growth and increase the pace of the innovative companies, in a way that provides insurtech in particular and the fintech sector as a whole with flexibility in dealing with regulatory requirements and at the same time focussing on policyholder protection.\r\n\r\n\u201cThe Regulatory sandbox regulations define a) an applicant (insurer or insurance intermediary or a person other than an individual having a networth of INR 10 Lakh and a standing of one financial year), b) regulatory sandbox and c) the sandbox environment,\u201d the IRDAI statement said.\r\n\r\nThe draft regulations are now open for stakeholders comments which can be sent by May 31, 2019.\r\n\r\n\r\nAuthorities Focus On Developing Indian Fintech Space\r\nThis development comes in after the RBI released its draft \u2018Enabling Framework for Regulatory Sandbox\u2019 in April to will allow fintech startups to test within a regulatory sandbox (RS).\r\n\r\nThe step had been taken after an inter-regulatory working group submitted its report in February 2018 and suggested to introduce an appropriate framework for a \u2018Regulatory Sandbox\u2019 within a well-defined space and duration.\r\n\r\nThe group consists of members from RBI, SEBI, Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA), National Payments Corporation of India (NPCI), Institute for Development and Research in Banking Technology (IDRBT), select banks and rating agencies which RBI had set up in July 2016.\r\n\r\nThe financial authorities have been taking several incentives to push the fintech space in India. The support was a need of the hour at a time when a report by government think tank Niti Aayog titled, Digital Payments \u2013 Trends, Issues and Opportunities said that the digital payment industry is expected to reach $1 Tn by 2023.\r\n\r\nApart from supporting the companies, RBI has also been taking steps to eliminate any form of fear among the users related to digital payments. In January, the central bank also launched the ombudsman scheme for online payments sector to redress the user complaints and grievances related to online transactions.