Working with regulatory bodies has its specific challenges. Luis Novella and David Ambrose shared lessons learned by VIVAT Group during the FCA Sandbox project. These slides are courtesy of Luis Novella and David Ambrose, VIVAT Group

1. Lessons Learned at
the FCA Sandbox
D1Conf
29 October 2018
Praha, Czechia

2. Outline About us
The FCA Sandbox: what & why
Independent Working Group (IWG)
Lessons Learned

3. We help companies define and execute winning strategies to accelerate
growth, mitigate risk, and seize market opportunities.
● VIVAT is a DISTRIBUTED TEAM that has worked together since 1996
● A handful of Senior Professionals across the US and Europe
● We deliver consulting services and co-create products with partners and customers
● We focus on disruption and innovation
● Our ethos is pivotal to our work, social impact, transparency, and customer centricity
https://vivat.co | @VIVATgroup
VIVAT - representing Etherisc in the UK
About us

4. David Ambrose
Technology
Blockchain
SaaS
30 years of enterprise software
implementation experience.
Studied = Mathematics & Computer Science
Home city = Orlando
From = Canada
Sport = Volleyball
Hobby = Software Development
US office
About us

5. Luis Novella
Business Technology
Strategy
Transformation
25 years of consulting and innovation
experience.
Studied = Information Systems & Management
Home city = London
From = Venezuela
Sport = Tennis & Rugby
Hobby = Food, Dogs & Biographies
UK office
About us

6. ➔ It regulates the financial services industry in the UK
➔ It runs a Regulatory Sandbox programme (4th cohort in progress)
➔ The Sandbox provides the ability to test innovative solutions with real customers in the live market
under controlled conditions
➔ The FCA is participating in the GFIN (Global Financial Innovation Network) - the structure is under
development. Current members include:
The Financial Conduct Authority (FCA)
FCA
Sandbox
Abu Dhabi Global Market (ADGM)
Autorité des marchés financiers (AMF, Quebec)
Australian Securities & Investments Commission (ASIC)
Bureau of Consumer Financial Protection (BCFP, USA)
Guernsey Financial Services Commission (GFSC)
Ontario Securities Commission (OSC, Canada)
Hong Kong Monetary Authority (HKMA)
Central Bank of Bahrain (CBB)
Dubai Financial Services Authority (DFSA)
Financial Conduct Authority (FCA, UK)
Monetary Authority of Singapore (MAS)
Consultative Group to Assist the Poor (CGAP)

7. Sandbox Cohort 4
29 participating
companies (69 applied)
Cohort 1 = 69 -> 18 (6) } 33% DLT
Cohort 2 = 77 -> 24 (9) | 37.5% DLT
Cohort 3 = 61 -> 18 (4) | 22% DLT
38%
11 are DLT-based
products
FCA
Sandbox

8. FCA
Sandbox

9. ➔ Proving that we can build a financial product based on DIP that fully complies with the FCA
➔ A vehicle to engage with UK underwriters (as an insurance intermediary)
➔ An opportunity to influence the UK regulatory framework in the FinTech and InsurTech sectors
➔ Create a community with other DLT companies in the Sandbox to share experiences and
knowledge
➔ A somewhat easier transition to joining the global sandbox (GFIN)
Main goals in participating in the Sandbox
FCA
Sandbox

10. Independent Working Group (IWG)
We invited all the DLT-based companies that we could in order to support each other and have a
common front towards the FCA
● Chatham House Rule applies (aka: what happens in Vegas, stays in Vegas)
● We provide introductions to help accelerate everyone’s journey
● We want to improve the FCA in relation to blockchain based products
● We have working meetings every fortnight and have created a real sense of community
Fostering a culture of community building.
IWG

11. FCA Sandbox cohort 4 - IWG Participants
A platform creates securities in blockchain form, simplifying and streamlining
end-to-end capital raising, custody, and administration services.
Capexmove is a platform that leverages blockchain technology to facilitate the
issuance and tokenisation of debt.
A DLT-based platform that allows companies to raise capital in a more
efficient and streamlined way.
Arranging
& CASS
Arranging Deals
/Investment & Arranging
safeguarding
UNSURE
What they do Authorisation(s)
IWG

12. FCA Sandbox cohort 4 - IWG Participants
Service that connects a centralised payment card to a decentralised
blockchain. Consumers hold their own assets in a decentralised smart
contract wallet and top up their card through simple exchange.
Service that uses smart contracts on a blockchain to provide fully automated,
decentralised flight delay insurance.
A DLT-based e-money platform which turns digital identity cards into secure
digital wallets through the use of smart contracts and fiat-backed tokens.
NONE
Small EMI
Insurance
intermediary
What they do Authorisation(s)
IWG

13. ➔ Be directive, tell the FCA what you want
➔ Emphasise your focus on Treating Customers
Fairly (TCF)
➔ Prepare to have formal compliance and
procedure documentation
➔ Be as communicative with the FCA as possible
(from Pre-Application to Authorisation case
officers)
➔ Don’t over emphasize Blockchain or
Cryptocurrencies
➔ Prepare sufficiently robust budgets to
undertake the Sandbox process
➔ Don’t underestimate the challenges in setting
basic operations
◆ Bank Account
◆ Professional Indemnity Insurance (PII)
➔ Be patient, the FCA are not setup for innovation
(yet) - but they are willing to listen and evolve
Lessons learned
Lessons
Learned

14. ➔ Etherisc
➔ VIVAT
➔ FCA
➔ GFNI
➔ AssetValut Blog
Useful links
➔ Capexmove
➔ Globacap
➔ Moneyfold
➔ 20|30
➔ Tokencard

15. Questions Thank you
David Ambrose
dambrose@vivatgroup.net
Luis Novella
lnovella@vivatgroup.net
D1Conf
29 October 2018
Praha, Czechia