Launching the ECSRC Regulatory Sandbox
Basseterre, January 31st, 2023
The ECSRC is pleased to confirm that it will shortly be opening its Regulatory Sandbox (sandbox) for applications.
The sandbox is designed to promote and facilitate financial innovation within the Eastern Caribbean Securities Market (ECSM) by:
- • Helping firms test innovative financial products or services in the real-world with real consumers
- • Helping the ECSRC learn about market developments and ensure appropriate regulatory frameworks are in place
The sandbox will soon be accepting applications from prospective equity crowdfunding intermediaries. Equity crowdfunding allows investors to provide financing to companies, in exchange for shares (equity) in that business. It is hoped that this will provide a valuable alternative way for smaller companies (MSMEs) to finance themselves, and to provide the public with another investment option.
Equity crowdfunding intermediaries will bring together companies with prospective investors (both retail and accredited investors) and facilitate transactions through the development of on-line platforms. Once authorised, these platforms will display investment opportunities from companies looking to raise money via equity crowdfunding, and allow investors to purchase equity in these companies.
The sandbox will look to help equity crowdfunding intermediaries based in the ECCU test their business model in the market, helping them understand and navigate regulatory requirements, working with them to design an appropriate platform, and then supervising a small-scale test to allow firms to operate in the market, while ensuring consumers are appropriately protected. If the test is successful, firms will be able to transition out of the sandbox, and operate at scale in the live market.
The ECSRC has developed rules (currently in draft) which outline the requirements for becoming a crowdfunding intermediary, which can be found at: https://ecsrccrowdfunding.com/draft-rules/. The ECSRC will also shortly publish eligibility criteria for the regulatory sandbox.
You do not currently need to be operating as an equity crowdfunding intermediary in order to apply, but you will need to be in a position to launch a suitable offering, and comply with the relevant regulations, in order to be accepted into the sandbox.
Businesses who may be interested in becoming an equity crowdfunding intermediary are encouraged to review the draft rules now, and to register their interest for the regulatory sandbox at https://ecsrccrowdfunding.com/contact/.