Risk management of digital financial market participants through the improved concept of a digital experimental environment (regulatory sandbox)

Abstract

The subject of the study is the methods of risk management of participants in the digital financial market. The instrument of the financial market regulator "regulatory sandbox" is currently being actively used or is being prepared for use in developed and developing countries, including the Russian Federation. The digital experimental environment – the author's interpretation of the regulatory sandbox – allows for live, time-limited testing of an innovative financial product or service under constant supervision and in cooperation with the regulator, allowing to reduce the risks not only of the regulator and other participants in the digital financial market, but also of end users of the service, increasing the safety and reliability of the latter. The main conclusions of the study are, firstly, the formation of an improved concept of the regulatory instrument of the financial regulator - a digital experimental environment, which is based on the best practices of the introduction and use of such regulatory instruments by regulators of foreign countries. Within the framework of the concept, the author presents the principles of the organization of the digital experimental environment, goals and objectives, risks, principles of organization, statistics on the timing of the application for participation and the experiment. Secondly, the identification of alternative methods to the regulatory sandbox, including the wait-and-see method and active monitoring. Thirdly, the risks of the regulator arising from the digital transformation of the financial market have been identified.