The National Regulatory Sandbox is an platform to promote innovation which presents a safe space to test or pilot solutions that potentially impacts a regulatory environment or requires a regulatory framework. Initiated by the Ministry of Finance Malaysia and facilitated by the National Strategic Unit, Futurise Centre and MaGIC, the initiative aims to create opportunities to further develop, accelerate and promote collaboration between entrepreneurs, corporations, regulators and the government.
Innovation is fast, but regulation usually takes time to catch up. In some cases, rather than comply with what may be dated and ill-fitting rules, companies like Uber, for instance, chose to thrive in the grey areas of regulation.
Jurassic, inflexible rules could kill innovative ideas. In order to be validated, ideas need to operate. But to operate, they need to comply with existing government regulations. For companies that are just starting out, this means that resources that could have been spent fine-tuning a product, finding market fit, or validating a business model go towards tedious compliance efforts instead.
The national Regulatory Sandbox initiative is being driven by the Ministry of Finance (MOF) as a combined National Blue Ocean Strategy (NBOS) and Transformasi Nasional 2050 (TN50) programme.
The programme will be championed by the National Regulatory Sandbox secretariat, jointly manned by the National Strategy Unit (NSU) at MOF, together with the Futurise Centre and the Malaysian Global Innovation & Creativity Centre (MaGIC).
The regulatory sandbox will create a controlled environment under the supervision of a
monitoring committee, that will help the Government better understand the vitality of
Innovators, corporates and even the public can submit their solutions to the sandbox which can be tested, and if proven suitable after the experimentation process, can be approved for the implementation. If necessary, suitable laws can be amended to accommodate the new solution.
The key elements in a Regulatory Sandbox are the participation of:
For innovators, the sandbox will help to:
For regulators, the sandbox will help to: