Abstract
Step by step, new digital technologies are capturing different spheres of our life. The opportunities of their application are almost infinite, and potential is very promising. But digital innovations as a trend represent a challenge for every modern state. Especially for member-countries of the BRICS union who seek to become the world’s leading countries. For this reason, the most important task for the members of BRICS is to create adequate “smart” regulation, which offers alternative ways of regulatory impact on transforming business relations. Using the regulatory sandbox as an experimental legal regime is one of the ways to test the creation, production, and realization of digital innovation. Having been first applied in 2016 in the United Kingdom, nowadays this model is successfully implemented in such countries as Singapore, Australia, and the United Arab Emirates. Member-countries of BRICS are only beginning to adopt this unorthodox tool; in most of its countries the legal framework is ongoing now. The aim of this research is to analyze current legislation and legal framework on the regulatory sandboxes in BRICS countries, define features of national models, difficulties and further prospects of its usage. This research is based on the comparative and formal juridical analysis of legislation, draft laws, and research papers dedicated to regulatory sandboxes in BRICS. The authors identify different barriers and risks of using regulatory sandboxes for the digital innovations successfully and offer some ways to overcome these challenges, including the formulation of guidelines for operating regulatory sandboxes based on a balance of public and private interests. The authors conclude that it is necessary to update legislation on the regulatory sandboxes for reaching positive effect from the digital transformation and make several suggestions for optimization its provisions. The results achieved in research paper can be used both in the lawmaking process as well as the foundation for further scientific researches.
Highlights
Step by step, new digital technologies are capturing different spheres of our life
There are four regulatory sandboxes available in the country: 1. The Fintech Supervisory Sandbox (FSS), launched by the Hong Kong Monetary Authority (HKMA) in September 2016, allowing banks and their partnering technology firms to conduct pilot trials of their FinTech initiatives involving a limited number of participating customers without the need to achieve full compliance with the Hong Kong Monetary Authority’s supervisory requirements; 2
We propose to set up a basic principles and measures which can support the interests and rights of regulators, participants of the regulatory sandboxes, and customers
Summary
According to current research, increased use of digital technologies could impact the productivity of the world’s top ten economies, adding US $ 1.36 trillion to those countries’ GDP by 2020. In the case of the Republic of Brazil, the impact on GDP could reach US $ 97 billion over the same period, leading Brazilian authorities to strive to enhance innovation development of the country. There was no legal framework in adopting a regulatory sandbox regime in the country. In June 2019, authorities of the Federative Republic of Brazil announced the development of a regulatory sandbox focused on testing business activity with new digital technologies, including blockchain. The new regulations will affect Brazil’s securities, financial, and capital markets. The goal of this step is to implement regulation in corresponding sectors to ensure compliance with the rules of each segment, regardless of
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