The sandbox allows businesses to test innovative propositions in the market with real consumers.

The scheme is open to authorised firms, unauthorised firms that require authorisation and technology businesses.

The sandbox seeks to provide firms with:

• the ability to test products and services in a controlled environment
• reduced time-to-market at potentially lower cost
• support in identifying appropriate consumer protection safeguards to build into new products and services
• better access to finance

It also offers tools such as restricted authorisation, individual guidance, informal steers, waivers and no enforcement action letters.

An FCA statement on the sandbox read: “We closely oversee tests using a customised regulatory environment for each test – including safeguards for consumers.

“Sandbox tests are expected to have a clear objective (e.g. reducing costs to consumers) and to be conducted on a small scale, so firms will test their innovation for limited duration with a limited number of customers.”

Applications to cohort 5 of the sandbox are now open.

The deadline for applications is 30 November.