The Cyprus Securities and Exchange Commission has issued the CYSEC’s Regulatory Sandbox to secure innovation, user security, and market integrity. As described on CYSEC’s website the Regulatory Sandbox’s aims are to “build a transparent channel of cooperation between entities developing technology-based solutions in the financial services falling within CySEC’s supervisory mandate and CySEC, and to ensure that the regulatory landscape evolves in line with the technological developments in the financial services”.
The legal landscape of the sandbox is as follows:
- It is open to all types of innovations and to regulated and unregulated entities
- There is no fee to participate
- The applicant exchanges their data for access to Cysec’s rights
- Being part of the sandbox does not exclude the innovator from the legal obligations that are imposed upon him by Cypriot law. The innovation must, therefore, comply with all legal provisions.
In order to apply, it is recommended that the innovator has considered the following
- The Genuity of the innovation
- The benefit to the market and consumers
- The readiness of the product
- The testing needs
- The product’s lifeline in the market
When applying the innovation will pass through 4 main phases: the application, the preparation, the testing and the evaluation phase. For each phase, the applicant must provide different information. For the application stage, the innovator should submit the business model, the activity of the entity, the regulatory status, the risk assessment and management procedures and the proposed testing parameters. The application will then be processed within 8 weeks.
If the application is successful then the innovator will move to the preparation phase which includes the drafting of a testing plan in cooperation with the Cysec officers this plan will include the testing duration, Cysec’s rights, the testing parameters, the risks, the exit mechanisms and the expected benefits. Once the testing plan is finalised the applicant will agree with Cysec to a Data Sharing Agreement and a Testing Agreement to commence the testing. The legal obligations of the parties during the testing phase will be governed by the Testing Agreement.
The Evaluation phase will give the applicant thirty days to submit their exit report after the testing is completed. The report can include the achievements, analysis of the results, user feedback and others. Cysec has discretion on whether to provide its feedback to the exit report. The applicant can then decide whether or not to proceed with publishing their innovation subject to the provisions of IP law.
At Christy’s our team will work with you to establish your needs and objectives for your Intellectual Property protection. We will identify the most suitable form, geographical extent, and availability of protection, always with a focus on your specific business needs both current and future, taking into account the need for contractual protection of ownership, and confidential information. Our focus is on dispute resolution where possible and swift action where time is of the essence and settlement is not an option, such as with counterfeit goods or where an injunction is necessary to prevent substantial damage to your business.
