The Act No. 189/14.05.2021 (Government Gazette B’ 2018/17.5.2021) of the Executive Committee of the Bank of Greece (“BoG”), introduced the creation of the BoG Regulatory Sandbox, which was designed and implemented by BoG in collaboration with the European Bank for Reconstruction and Development (EBRD).

BoG Regulatory Sandbox constitutes a regulatory regime that offers its participants a controlled environment in which they can test their innovative Financial Technology (“FinTech”) products/services on a limited number of users under the BoG regulatory supervision.

Eligibility criteria

The provisions governing the operation of BoG Regulatory Sandbox, shall apply only to institutions authorized and supervised by BoG. These include amongst others, credit institutions established in Greece, branches of credit institutions based in a third country and operating in Greece, leasing and factoring companies, e-money institutions, payment institution etc. Non-authorized interested parties will have to either obtain first the appropriate authorization or establish a partnership with an authorized entity and enter BoG Regulatory Sandbox together.

For the admission of an institution into BoG Regulatory Sandbox, its proposed products and/or services to be tested, should meet the following eligibility criteria. Specifically, they need to be:

* foreseen within the scope of the applicant institution’s authorization, be in line with their statute and fall under BoG’s remit
* genuinely innovative or significantly different from those currently available within the Greek market
* beneficial for users of financial services and the financial market
* ready for testing in a live environment
* deployed in the Greek market

The phases of BoG Regulatory Sandbox process

1) Application phase

Institutions meeting the above criteria may submit an application for admission in BoG Regulatory Sandbox. The application should include the description of the business model of the FinTech product/service to be tested, various testing parameters, such as the testing period and information concerning the range of users to whom it will be addressed and a brief description of an Exit and Transition Plan from the BoG Regulatory Sandbox. BoG then reviews the submitted applications and informs the institutions about their outcome.

2) Preparation phase

In case of being accepted to the Regulatory Sandbox, the institutions proceed to the Preparation Stage, where they are required to draft and submit a Test Parameters Plan. The plan should at least include the testing parameters, an Exit and Transition Plan, measures to ensure that users are well-informed that the offered product/service is being tested within the scope of BoG Regulatory Sandbox, risk management measures and Key performance indicators (KPIs).

3) Testing phase

Next, institutions can proceed to providing their products/services in a “live” environment for a period lasting up to 6 months whilst the BoG oversees compliance with the requirements set in their Test Parameters Plan as well as with the applicable regulatory framework.

4) Evaluation/ Exit phase

During this phase, institutions should submit a report including their overall findings during the Testing phase in comparison to their pre-defined testing objectives and expected outcomes. BoG then evaluates the test by assessing the performance of the product/service during the Testing phase and informs the institutions on whether the test is successful or not. The institutions continue to provide the service/product to the users, in accordance with the terms and conditions of their Test Parameters Plan, until they are being notified of the completion of the above evaluation process by the BoG. At that time, institutions implement their Exit and Transition Plan, in order to finally exit BoG Regulatory Sandbox.

Overall, the operation of BoG Regulatory Sandbox can help participants address the complexities of regulations whereas BoG shall gain knowledge of the new emerging financial technologies in an attempt to identify associated risks before such products/services are launched in the market.

The editorial team