Centre for Regulatory Innovation: Regulatory experimentation
A regulatory experiment is a trial or test of a new product, service, approach or process designed to generate evidence or information that can inform the design or administration of a regulatory regime.
Nesta, a UK-based innovation foundation, has identified the following approaches to regulatory experimentation:
- advisory approaches, which help businesses make sure that new products and services adhere to existing regulations. The intended outcome is a change to the product or service.
- adaptive approaches, which support new innovations by adapting existing regulatory frameworks. The intended outcome is a change to both a product or service and the regulatory framework.
- anticipatory approaches, which involve iterative development of regulation and standards in an emerging field. The goal is to better understand a technology’s impact on the economy and on society, and the associated regulatory needs in the short term and the long term.
Types of experiments that can help develop or adapt regulations for emerging technologies include:
- regulatory pilots: testing a proposed set of regulations for a limited number of products, in a limited area, or for a limited group of users
- regulatory exploration: testing conducted when it is unclear whether a new product or innovation is covered in an existing regulatory regime, how existing regulations would apply, and whether new regulations are required
- regulatory sandboxes: a controlled space where an activity can be conducted under a regulator’s supervision, without immediately being subject to all applicable regulations. Some of the existing regulatory framework may be waived or exemptions granted, but the ones needed to ensure protection for the public or customers in the real world remain
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