International law firm Simmons and Simmons has advised UK Finance on its response to HM Treasury's consultation paper on its proposed Digital Securities Sandbox (DSS). The DSS will allow participating firms to test new technologies when operating certain financial markets infrastructures. Regulators will be empowered to disapply or modify legislation to facilitate that testing, subject to ongoing supervision and controls. Legislative changes may also be made permanent through the DSS.
Rosali Pretorius, a Partner in the firm's Financial Services Regulatory team, said "We're delighted to have assisted UK Finance in its response to this important consultation. The DSS will be the UK's first flagship sandbox created under the powers granted to the regulators under the FSMA Act 2023, and will be a useful mechanism to identify and implement regulatory change. If designed correctly, the DSS can be the catalyst that’s needed for distributed ledger technology and digital securities to flourish. We look forward to seeing the final proposals."
Oliver Ward, a Managing Associate in the firm's Structured Finance and Derivatives team, commented that "The DSS is the centrepiece of the UK Government's plans to digitalise the issuance and trading of securities, and to become the 'go to' destination for innovation in the financial markets. We thank UK Finance and its members for their valuable insights when preparing the response.”
The UK Finance consultation response is accessible here. HM Treasury's consultation paper is available here.