It follows a one-month consultation on the proposed framework that was released on July 29, 2016.
In a statement, the central bank said the regulatory sandbox would enable the experimentation of fintech solutions in a ‘live’ environment, subject to appropriate safeguards and regulatory requirements.
It said over 60 comments and suggestions were received from various stakeholders, including financial institutions, fintech companies, associations and other corporations.
Following the comments and suggestions received, BNM said it had expanded the eligibility criteria to clarify the focus of innovations that the sandbox aimed to support.
“Innovations should have clear potential to improve the accessibility, efficiency, security and quality of financial services.
“It should also enhance the efficiency and effectiveness of Malaysian financial institutions’ management of risks, or address gaps in or open up new opportunities for financing or investments in the Malaysian economy,” said the bank.
The framework will take effect immediately and is now open for application.
BNM said applicants to the sandbox should be able to demonstrate that a product, service or solution had been developed to a functional stage and was ready for testing.
The central bank will inform applicants of their eligibility to participate in the sandbox within 15 working days of receiving a complete application.
This will be followed by preparatory engagements between it and the applicant prior to testing.