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Israel Considers Regulatory Sandbox Program for Fintech Startups

The program proposed is intended to promote adoption of innovative fintech technologies in Israel

Lilach Baumer 12:5225.02.19

An Israeli inter-ministerial team is recommending the establishment of a regulatory sandbox for fintech startups, intended to provide early stage companies with regulatory mentoring and time-limited exemptions.

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In August 2017, the Israeli Ministry of Finance published a call for information with the intention of lifting local regulatory obstacles. At the time, the ministry cited several similar programs offered or tested in the U.K., U.S., Russia, Australia, and Canada. A similar program was considered for companies interested in initial coin offerings in 2018.

Fintech. Photo: Shutterstock

In January 2018, a team was compiled of representatives from the finance ministry, the Ministry of Justice, the Israel Securities Authority, the Israel Tax Authority, and other relevant authorities.

On Sunday, the finance ministry announced the team's recommendations. Those include setting up a one-stop address for companies whose activity or technology is outside the existing regulatory scope, with the intention of promoting the widespread adoption of innovative fintech technologies in Israel. Exemptions could pertain to preconditions such as minimum self-capital or proper disclosures.