GFIN initiative: Bank of Lithuania’s regulatory sandbox will be used for testing sustainability report prototypes
The regulatory sandbox of the Bank of Lithuania will be used by a Polish company to develop a template for sustainability reports, which could be used globally. The practical suitability of this product will be assessed by three central banks and three financial market supervisory authorities.
“We are opening a new page of innovation development at the Bank of Lithuania: we will help develop a tool in our regulatory sandbox which would transcend country boundaries in terms of its universal nature and usage possibilities. These project features attracted partners from various countries around the world. We chose sustainability reports to be tested in our sandbox, as they are relevant to all jurisdictions participating in the project,” said Marius Jurgilas, Member of the Board of the Bank of Lithuania.
The Board of the Bank of Lithuania gave permission to a Polish company Business Reporting-Advisory Group to test its ATOME: Matter tool in the regulatory sandbox. The objective of the test is to develop a sustainability reporting template that allows to monitor how financial market participants manage sustainability-related risks and to perform climate change-related data analysis, such as the assessment of financial assets and portfolio sustainability risks and the carbon footprint in the projects financed by financial market participants and the identification of sectors that make a significant impact on climate change.
Project participants will include central banks of the United Arab Emirates and Bahrain as well as financial market supervisory authorities of Abu Dabi (United Arab Emirates), Astana (Kazakhstan) and Bermuda, which all belong to the Global Financial Innovation Network (GFIN). Together with the Bank of Lithuania, they will assess this tool in the regulatory sandbox, so that the markets are better prepared for sustainability reporting, which is planned in the future.
GFIN, which also includes the Bank of Lithuania, invites companies from all over the world to test innovative financial products, services, business models and regulatory technologies in several countries or jurisdictions at once. More than 60 financial market supervisory authorities from various jurisdictions (Australia, Hong Kong, the United Kingdom, Singapore, etc.) are currently GFIN members. More information is available here.
ATOME: Matter is dedicated to the development of metadata-based reporting forms that could be used both by supervisory authorities and consultancy companies or market participants, using an innovative environment. Depending on the needs, this tool may be harmonised with various standard international reporting requirements or converted to other technical formats. Application Programming Interfaces (APIs) may be used for the exchange of technical files.
The Bank of Lithuania regulatory sandbox allows companies to develop innovative financial products and test their business solutions in a live environment under its guidance and supervision. This enables companies to assess potential risks and regulatory issues in advance and ensures that high-quality and safe products and services enter the market. The sandbox has already been used for the testing of the peer-to-peer insurance platform.