41-5605 - Scope

41-5605. Scope

A. If the attorney general approves an application for entry into the regulatory sandbox, the applicant is deemed a sandbox participant and both of the following apply:

1. The sandbox participant has twenty-four months after the date of approval to test the innovation described in the sandbox participant's application.

2. The attorney general must issue the sandbox participant a registration number.

B. Innovations tested within the regulatory sandbox are subject to the following restrictions:

1. Consumers must be residents of this state, except for transactions that involve an innovation provided by a sandbox participant testing financial products or services as a money transmitter as defined in section 6-1241 or a related innovation, in which case only physical presence of the consumer in this state at the time of the transaction may be required.

2. Except as provided in subsection C of this section or section 41-5608, an innovation may not be tested with more than ten thousand consumers.

3. For a sandbox participant testing consumer lender loans as defined in section 6-601, an individual consumer lender loan may be issued for up to $15,000, except that aggregate loans per consumer may not exceed $50,000. All consumer lender loans issued in the regulatory sandbox, including loans in excess of $10,000, are subject to all of the following:

(a) Section 6-114.

(b) Section 6-632.

(d) Section 6-637.

4. Except as provided in subsection C of this section, for a sandbox participant testing financial products or services as a money transmitter as defined in section 6-1241, individual transactions per consumer may not exceed $2,500 and aggregate transactions per consumer may not exceed $25,000.

5. For sandbox participants testing financial products or services as a sales finance company as defined in section 44-281, all of the following apply:

(a) Section 44-286.

(b) Section 44-287, except subsection B, paragraph 8.

(d) Section 44-289.

(e) Section 44-290.

(f) Section 44-291.

(g) Section 44-293.

(h) Section 47-9601.

6. For sandbox participants testing financial products or services that provide investment management that is regulated pursuant to title 44, chapter 13:

(a) Section 44-3241 applies.

(b) The corporation commission rules adopted pursuant to title 44, chapter 13 apply as they relate to dishonest and unethical practices.

C. If a sandbox participant demonstrates adequate financial capitalization, risk management process and management oversight, the attorney general may allow either or both of the following:

1. Except as provided in section 41-5608, an innovation to not be tested with more than seventeen thousand five hundred consumers.

2. For a sandbox participant testing products or services as a money transmitter as defined in section 6-1241, individual transactions per consumer that do not exceed $15,000 and aggregate transactions per consumer that do not exceed $50,000.

D. This section does not restrict a sandbox participant who holds a license or other authorization in another jurisdiction from acting pursuant to and in accordance with that license or other authorization.

E. A sandbox participant is deemed to possess an appropriate license under the laws of this state for purposes of any provision of federal law requiring state licensure or authorization.

F. Except as otherwise provided in this chapter, a sandbox participant is not subject to state laws that establish requirements pursuant to a license or authorization issued by an applicable agency that otherwise would or may regulate an innovative financial product or service.

G. The attorney general may determine that certain state laws that regulate a financial product or service or innovation apply to a sandbox participant. If the attorney general makes this determination and approves an application for entry into the regulatory sandbox, the attorney general must notify the sandbox participant of the specific state regulatory laws that will apply to the sandbox participant. Pursuant to section 41-5611, the attorney general alone shall enforce the state regulatory laws applicable to sandbox participants, including the restrictions established by this section.

H. To the extent that a sandbox participant is required by this chapter to obtain, record, provide or maintain any information, writing, signature, record or disclosure, the sandbox participant may do so in electronic form, including as provided in section 44-7601, or may substitute any substantially similar equivalent information, writing, signature, record or disclosure that is approved by the attorney general.