Good news: the UK Digital Securities Sandbox is officially open!

This is an exciting development. In view of the level of industry engagement in this space, particularly during the Sandbox consultation earlier this year, we anticipate that a number of firms will now be rushing to submit applications to enter the Sandbox – with some already having announced their intention to do so.   

There have been a number of industry wins in the published Policy Statement and related materials, including:

• Extending the scope of the DSS to include non-sterling denominated assets
• Flexibility upwards on the application of Gate 2 capacity limits to firms
• Confirmation that the Bank will reconsider its original position on the rules for Gate 3 and beyond, acknowledging that the post-Sandbox regime may need to be better tailored
• Confirmation that generally DSDs are not expected to fall under the UK CTP regime
• Confirmation that regulators have listened to industry requests for clear and open communication about progress of the DSS, and will be organising periodic and ad-hoc roundtables to facilitate this

The application window for prospective DSS entrants is expected to close in March 2027.  As a reminder, the DSS is slated to be operational until December 2028 (but this may be extended).

We will be publishing more on this shortly.  In the meantime, further information can be found via the links below:

• Digital Securities Sandbox Policy Statement
• Guidance on the operation of the Digital Securities Sandbox 
• FCA landing page with application form to enter DSS and supporting notes
• Bank of England landing page including draft application progress and questionnaire for Gate 2 
• Digital Securities Sandbox Consultation Paper