The House of Lords Financial Services Regulation Select Committee has launched an inquiry into the use of regulatory sandboxes in UK financial services.
The inquiry will examine how regulators and firms use regulatory sandboxes, and whether they are effective in supporting innovation in the sector. The Committee is seeking views on whether sandboxes promote innovation, deliver wider public benefits and value for money, influence markets through the selection of participating firms, and help inform good regulatory policy, particularly in relation to emerging technologies. For the purposes of the inquiry, "regulatory sandboxes" include the different types of sandbox operated by the FCA, including its Regulatory Sandbox and Digital Sandboxes, as well as the Digital Securities Sandbox operated jointly with the Bank of England.
The Committee is inviting evidence from a broad range of stakeholders with experience of, or views on, regulatory sandboxes, including firms that have participated in a sandbox and those that have not.
The Committee seeks evidence on the following questions:
- What purposes do regulatory sandboxes serve in UK financial services and has their role changed in the ten years since the launch of the first FCA sandbox in 2016?
- What has been the impact of regulatory sandboxes on UK financial services, and how has this been measured? Has the long-term impact of regulatory sandboxes been sufficiently assessed?
- Have regulatory sandboxes improved innovation and competition in UK financial services?
- Do regulatory sandboxes provide wider public benefit and value for money, compared with other forms of regulatory and market engagement?
- Why do firms choose to apply, or not to apply, to participate in a regulatory sandbox?
- How well do the eligibility criteria and selection processes for regulatory sandboxes operate?
- What effects does participation in a regulatory sandbox have on participating and non-participating firms, investors and the wider market?
- What role should regulatory sandboxes play in informing the development of regulation, particularly for emerging technologies?
- How effectively do regulators learn from regulatory sandboxes? To what extent are learnings from regulatory sandboxes shared or used more widely?
- How effectively do regulatory sandboxes manage risks to consumers and markets, and what safeguards and accountability arrangements are in place?
- To what extent are regulatory sandboxes being used to test agentic AI, and does this introduce any new risks for the use of regulatory sandboxes?
- How does the UK's use of regulatory sandboxes in financial services compare with approaches in other jurisdictions and sectors?
The deadline for submitting evidence is 23 October 2026.
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