Regulatory Sandbox

Emerging Technology (ET) applications are helping to accelerate industry maturity across sectors and impacting businesses, consumers, and governments alike. Such technologies are becoming key drivers of economic growth and include the Internet of Things (IoT), Cloud Computing, Artificial Intelligence (AI) and Machine Learning (ML), Blockchain, Big Data & Advanced Analytics, 5G Technology, Robotics, Advanced Manufacturing, Augmented / Virtual Reality (AR/VR), Digital Twin, RegTech and Autonomous Vehicles among others.

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In line with Vision 2030 and to help achieve economic growth and increase investments in the KSA, the Communication, Space and Technology Commission (CST) has designed an Emerging Technology Regulatory Sandbox to support firms wishing to test innovative ET solutions in a ‘safe’ environment with the intent to commercialize them. The Sandbox aims to help businesses successfully launch innovative business models, products and services in the KSA market while trying better to understand the impact of ET from a regulatory perspective.

The Emerging Technology Regulatory Sandbox is suitable for start-ups, SMEs, and established firms looking for clarity around ET-related regulations. Firms participating in the sandbox will be able to test their business model, product and services for a specified period. After successful testing, participants can take their solutions to market.

Objectives of the Emerging Technologies (ET) Sandbox

The main objectives of the Sandbox are to:

Create a flexible environment for participants, which allows the launch of innovative business models, solutions, and services;
Support entrepreneurs and innovators in emerging technologies development;
Develop the emerging technologies industry and enhance the comprehensiveness of products available in the market.

Targeted technologies

Benefits

The Sandbox is expected to bring benefits to participants in the Sandbox, consumers and KSA Regulators.

Participants:

Reduce time-to-market by streamlining the authorization process.
Reduce regulatory uncertainty around new technologies and business models.
Save costs on legal advice, marketing, and testing.
Improve access to capital.

Consumers:

Encourage the introduction of new business models, products and services that provide higher functional benefits for customers.
Encourage the introduction of new business models, products and services that provide financial benefits for customers.

KSA Regulators:

Leverage the CST ET Regulatory Sandbox to inform policymaking relating to emerging technologies.
Demonstrate commitment to cross-government cooperation.
Update regulations to promote beneficial innovation.

Scope of the ET Regulatory Sandbox

The Regulatory Sandbox is open to:

New use cases and business models: Companies proposing a new digital business model that leverages emerging technologies.
Innovations in existing use cases: solutions that offer significant improvements in existing use cases enabled by emerging technologies.
ET enabled services requiring regulatory amendments: proposed ET-enabled services where beneficial market development is constrained because they are:

- Currently not regulated, or
- are regulated under a broad CST regulation not specific to their market application.

CST regulated: All participants are currently or, upon launch of new services, will be required to comply with CST regulation and / or jurisdiction.

The Regulatory Sandbox is not suitable for participants with:

Business models, products and services that fail to demonstrate added value for customers and/ or business stakeholders compared with existing offerings in KSA.
Unmature business models, products and services: The Emerging Technology Regulatory Sandbox is focused on applications for business models, products and services that are ready for or are already commercialized.
Testing plans that are not complete or realistic: Participants must approach CST with a clear idea about the objectives of their testing plan and how they intend to achieve them.