On June 23, the Central Bank of Nigeria (CBN) published for comments a circular including the draft Regulatory Framework for Sandbox Operations (the ‘Framework’).
The Framework defines the establishment, rules and operations of a Regulatory Sandbox for the Nigerian payments system with the aim to (among others) foster technological innovation, financial inclusion and public confidence in the financial system.
Addressed to all deposit money banks, mobile money operators and payment service providers, the Framework outlines the following points:
Eligibility criteria for participants (e.g. requirement for the applicant to have the resources to support testing in the sandbox)
Application and approval process (e.g. documents requirements (certificate of incorporation, AML & KYC policy …))
Operational requirements (e.g. Filing and reporting requirements, exit conditions)
Sandbox cohorts’ requirements (i.e. number of innovators that will enter the Sandbox at the same time for the same period)
Responsibilities of the CBN (e.g. Issuance of Letter of Approval, oversight and monitoring)
Responsibilities of participants (e.g. responsibility to monitor and supervise the activities of its operations and staff)
Positioning of customer safeguards (e.g. limitations on the type and size of transactions)
To note, products already rejected by the regulators or the Federal Government of Nigeria will not qualify for sandbox trials.
The draft Regulatory Framework for Sandbox Operations can be found here: