SEC Commissioner Hester Peirce is advocating for a collaborative financial sandbox between the US and UK to promote cross-border financial innovation. Peirce supports the joint consultation paper on a “Digital Securities Sandbox” by the Bank of England and the Financial Conduct Authority, which aims to explore the use of distributed ledger technology (DLT) in securities issuance, trading, and settlement while ensuring investor protection, market integrity, and financial stability. Peirce proposes a cross-border sandbox that would allow firms in both countries to conduct identical sandbox activities under the same regulatory requirements. This would involve including US-domiciled firms in the UK’s sandbox, supported by a micro-innovation sandbox established by the SEC and an information-sharing agreement between the two jurisdictions. Peirce believes that a cross-border sandbox offers greater transformative potential and highlights the US and UK’s shared commitment to capital markets, integrated financial systems, and their roles as global financial service providers and technology hubs. The collaboration would benefit innovators, regulators, and consumers in both countries. Peirce’s proposal may not be immediately actionable, but she sees the consultation paper as an opportunity to discuss greater cross-border collaboration in facilitating innovation. She looks forward to engaging with colleagues and interested members of the public in the US and UK to bring a cross-border sandbox to life.
