Eleven national financial regulators and related organisations have decided to establish a Global Financial Innovation Network, building on a proposal earlier this year to create a ‘global sandbox.’

Recognising the global nature of today’s financial services sector, the network will seek to provide 'innovative firms' (financial technological or 'fintech' start-ups and others) to interact with regulators all over the world in the most efficient way yet, helping them choose between countries when planning fresh software. It will also create a new way in which financial regulators can co-operate on the subject of IT, sharing their different experiences and approaches.

The eleven bodies hail overwhelmingly from former British jurisdictions. They are: the Abu Dhabi Global Market; the Autorité des marchés financiers of Québec; the Australian Securities & Investments Commission; the Central Bank of Bahrain; the Dubai Financial Services Authority; the UK's Financial Conduct Authority; the Guernsey Financial Services Commission; the Global Financial Innovation Network itself (contact Steve Chandler at innovate@gfsc.gg); the Hong Kong Monetary Authority; the Monetary Authority of Singapore; the Ontario Securities Commission; and the Consultative Group to Assist the Poor. Guernsey's participation in this network builds on its existing Innovation Soundbox, which welcomes FinTech firms into the Bailiwick from all over the world. The UK opened the "mother of all sandboxes" in June 2016 and has now taken on the fourth cohort of new firms that will benefit from its relaxation of "investor protection" rules.

The collaborating bodies, through their new project, are also canvassing the public for opinions about the part that GFIN should play and the tools that it should use as it struggles to fulfil its objectives. They plan to give the project three main functions:

• to act as a network of regulators that collaborate in relation to, and share experience of innovation in, various markets, looking at emerging technology and business models;
• to provide a forum in which they can discuss policies and work on them; and
• to provide firms with an environment in which to try out cross-border products and services.

The project is in its very earliest stages, so the regulators are welcoming as many comments as possible. The deadline for this is 18 October.

Firms that apply to conduct cross-border trials must obviously meet some prerequisites for entry; the regulators have yet to determine these but will eventually make them public. In a Balkanised fudge worthy of the Austro-Hungarian empire, the regulators are not proposing to establish a worldwide set of criteria but want instead to leave such decisions to each jurisdiction. The discussion paper seems to find favour with the idea that any new regulator that joins the scheme need not "facilitate supporting trials," whatever that might mean, as long as it makes this plain to firms that are thinking of applying to participate. Some regulatory members might wish instead to take advantage of "the network and joint work" only.

As part of the trial process, firms must demonstrate that they are capable of operating in more than one jurisdiction for the duration of any trial. A firm that wants to approach the GFIN too early for cross-border trials might find it more suitable to try things out in one jurisdiction before moving to others. Cross-border trials might first apply to 'cohorts' (intakes of applicants) and topics, the better to manage resources and allow the regulators to learn how to operate trials in the first place. The first trials could limit firms to the number of jurisdictions in which they want to test, although this could rise in the future. Another option might be to have a rolling application process rather than cohorts, whereby firms might submit applications at any time. This could provide greater flexibility for firms wishing to apply. The application of first instance must go to the home regulator. At the end of each trial, the head of the project intends to tell each firm about the merits of the product or service and the ways in which it benefits consumers or the wider financial market.