The Digital Securities Sandbox (DSS) reshapes how we regulate by allowing firms to test legislative changes in real world scenarios before the changes are implemented.

The Bank of England and the FCA have opened the DSS.

We encourage firms that are innovating in financial market infrastructure to apply and have published guidance to help them.

The DSS gives firms the opportunity to explore new technologies in traditional financial markets, for example, distributed ledger technology (DLT), a system for storing and managing information distributed across participants in a network. This technology has the potential to improve efficiency and reduce costs in wholesale markets, benefitting industry and investors.

We believe the DSS could also lead to a quicker, more effective and collaborative way of delivering regulatory change.

The DSS supports innovation, helps protect financial stability and strengthens the UK’s leading position as a global and vibrant financial centre, built on globally respected high standards.

Support for firms

There is a range of support available to firms to help them through the application process. For example, firms can arrange pre-application meetings to better understand the DSS requirements and can find an introductory video on the Bank’s websiteLink is external.

Find out more about the support available.

The Bank and the FCA are working together to operate the DSS. We’ve published the response to the DSS consultation paperLink is external and updated our guidance for participantsLink is external.

More information

• The DSS could support financial instruments such as equities, corporate and government bonds, money market instruments such as commercial paper and certificate of deposits, units in collective investment undertakings (fund units) and emissions allowances.
• The trading and settlement of derivative contracts and of ‘unbacked cryptoassets’ such as Bitcoin are not in the scope of the DSS.
• This follows a joint consultation by the Bank and the FCALink is external on the DSS.]

Source: FCA