SEC Commissioner Hester Peirce is advocating for a joint US-UK digital securities sandbox to promote cross-border financial innovation. In her statement, she referenced the "Digital Securities Sandbox joint Bank of England and FCA consultation paper" and highlighted its potential to streamline the issuance, trading, and settlement of securities using distributed ledger technology (DLT) while ensuring investor protection and market integrity.
Peirce proposed the establishment of a cross-border sandbox that would allow firms from both countries to conduct identical sandbox activities under the same regulatory requirements. She suggested including U.S.-domiciled firms in the existing DSS and creating a micro-innovation sandbox by the SEC, supported by an information-sharing agreement between the two jurisdictions. This expanded eligibility would enable firms to experiment with technologies like DLT for securities activities while adhering to chosen regulatory conditions.
The SEC commissioner stressed that a cross-border sandbox offers more transformative potential than a domestic one. She emphasized that the U.S. and UK are well-positioned for this collaboration due to their shared commitment to capital markets, integrated financial systems, and roles as global financial service providers and technology hubs. Peirce believes that this joint initiative would benefit innovators, regulators, and consumers in both countries.
While acknowledging that her proposal may not be immediately actionable, Peirce expressed her enthusiasm for discussing greater cross-border collaboration in facilitating innovation. She looks forward to engaging with colleagues from the US, as well as interested members of the public from both countries, to bring the cross-border sandbox to life.
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