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ATTORNEY GENERAL
OFFICE OF THE ARIZONA ATTORNEY GENERAL
Paul Watkins
Chief Counsel, Civil Litigation Division
(602) 542-0189
Paul.Watkins@azag.gov
______________________________________________________________________________
An Act
Amending Title 6, Arizona Revised Statutes, By Adding Chapter 18; Relation to the
Creation of a Financial Products and Services Regulatory Sandbox
6-1801. Definitions
In this chapter, unless the context otherwise requires:
1. Consumer means a person who purchased or otherwise entered into a
transaction or agreement to receive an innovative financial product or service being tested by a
person participating in the regulatory sandbox.
2. Department means the Department of Financial Institutions.
3. Financial product or service means a product or service that falls under the
departments regulatory jurisdiction or a product or service that includes elements that may
otherwise require a permit, license, certification, or recognition as a financial institution or
enterprise regulated by the department.
4. Innovative financial product or service means a financial product or service
that includes an innovation.
5. Innovation means, with respect to a product or service, that which uses or
incorporates new or emerging technology, or reimagines uses for existing technology, to address
a problem, provide a benefit, or otherwise offer a product, service, business model, or delivery
mechanism that has no comparable widespread offering in the marketplace regulated by the
department.
6. Person means any legal person.
Mark Brnovich Arizona Regulatory Sandbox Draft Legislative Proposal
Page 2
7. Regulatory Sandbox means the program established by this chapter that allows
a person to temporarily test innovative financial products, services, business models, or delivery
mechanisms on a limited basis without being required to first obtain full status as a regulated
financial institution or enterprise.
8. Test means to provide products and services as allowed by this chapter.
iv. What risks will confront consumers that use or purchase the
innovative product or service;
v. How entering the regulatory sandbox would enable a
successful test of the innovation;
vi. A description of the proposed testing plan, including
estimated time periods for market entry, exit, and pursuit of necessary
permits or licensure; and
vii. How the person will wind down the test and protect
consumers in the event the test fails.
G. The department must collect an application fee of not less than five
hundred dollars per application.
H. A separate application must be filed for each innovation sought to be
tested.
I. After the information required by paragraph F is submitted, the
department may seek additional information it deems necessary. No later than 90 days
after an application is initially submitted, the department must notify applicants as to
whether an application has been approved for entry into the regulatory sandbox. The
department and an applicant may mutually agree to extend the time for the department to
determine whether an application can be approved for entry into the regulatory sandbox.
J. The department may deny applications in its sole discretion and any such
denial is not appealable.
time test period extension before the end of the initial 12 month test period. Denials of an
extension request are within the departments sole discretion and any such denial is not
appealable.
C. Persons in the regulatory sandbox may request an extension of the
regulatory sandbox period to pursue a license, permit, certification, or any other
recognition as required by this Title. Such requests must be made no later than 30 days
before the end of the regulatory sandbox test period.
D. The department must grant or deny a request for an extension to pursue a
license permit, certification, or other recognition by the end of the regulatory sandbox test
period. In no event shall an extension to pursue a license, permit, certification, or other
recognition be effective for more than one year from the end of the regulatory sandbox
test period.