SEC approves Blockshoals for fintech sandbox testing

THE SECURITIES and Exchange Commission (SEC) has approved Blockshoals Technologies, Inc. to test its financial products and services under the SEC’s regulatory sandbox, as part of the regulator’s drive to support innovation in the financial sector.

At its Nov. 12 meeting, the Commission En Banc granted the domestic fintech firm in-principle approval to join the sandbox, pending the fulfillment of some remaining requirements, the SEC said in a statement on Tuesday.

The SEC StratBox, established under SEC Memorandum Circular No. 9, Series of 2024, is a regulatory sandbox that allows firms to test “innovative” products or services in a live, controlled environment before making them widely available.

Testing in the StratBox lasts 24 months but may be shortened or extended after the first year, based on periodic reviews.

Under this framework, the SEC can provide regulatory relief to sandbox participants by modifying or waiving licensing, registration, compliance, or other regulatory requirements that would normally apply during the testing phase.

“The SEC continues to review other applications, and remains open to receiving more proposals for its regulatory sandbox, as part of the Commission’s commitment to advancing innovations in the capital market,” the commission said.

With Blockshoals’ approval, there are now four entities actively testing products or services in the SEC StratBox: two focus on US equities offerings, while one involves tokenized real estate. — Alexandria Grace C. Magno