New regulatory powers Financial market infrastructure: regulatory sandboxes Variation from the affirmative SI procedure
The Act enables HM Treasury and the regulators to modify relevant enactments (including primary legislation, secondary legislation, and technical standards and rules) by applying the negative statutory instrument procedure, in place of the more standard affirmative procedure. The approach, in the context of these clauses, is reasonable because the modifications are temporary in nature and will be available to a limited number of entities that have been approved by the regulators to participate in a particular FMI sandbox. Limitations may be placed on the amount and values of instruments permitted for an FMI activity in an FMI sandbox. FMI entities will be carefully monitored by the regulators for the duration of the FMI Sandbox and the regulators will be permitted to suspend or terminate an FMI entity for breaching the terms of an FMI sandbox or the legislative requirements. If this occurs, the general law, as it exists outside of an FMI sandbox, would then apply once more.
	The negative statutory instrument procedure will be limited to the modification of legislation that appears as a relevant enactment on face of the Act at section 17(3). Any additions to this list of legislation are intended to be approved by affirmative statutory instrument procedure.
	A report will be made to Parliament outlining the performance of an FMI Sandbox, in advance of any proposed permanent changes to legislation which will be subject to the affirmative statutory instrument procedure where primary legislation is amended, otherwise the negative procedure will apply. This is intended to ensure that Parliament is afforded an appropriate level of scrutiny.
	It is possible that certain enabling legislation will fall to the rule-making powers of regulators, where the powers within the proposed future regulatory framework are to be implemented. As a result, in future the functioning of the FMI Sandbox may evolve with the regulators, rather than HM Treasury, being responsible for making the majority of legislative changes to be tested in a FMI sandbox