Arizona Laws 41-5603. Application process and requirements; fee
A. Any person may apply to enter the regulatory sandbox to test an innovation.
Terms Used In Arizona Laws 41-5603
- Action: includes any matter or proceeding in a court, civil or criminal. See Arizona Laws 1-215
- Financial product or service: means a product or service that requires licensure under title 6 or Title 44, Chapter 2. See Arizona Laws 41-5601
- Fraud: Intentional deception resulting in injury to another.
- including: means not limited to and is not a term of exclusion. See Arizona Laws 1-215
- Innovation: means the use or incorporation of new or emerging technology or the reimagination of uses for existing technology to address a problem, provide a benefit or otherwise offer a product, service, business model or delivery mechanism that is not known by the attorney general to have a comparable widespread offering in this state. See Arizona Laws 41-5601
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
- Regulatory sandbox: means the program established by this chapter that allows a person to temporarily test an innovation on a limited basis without otherwise being licensed or authorized to act under the laws of this state. See Arizona Laws 41-5601
- Test: means to provide products and services as allowed by this chapter. See Arizona Laws 41-5601
B. The attorney general must accept and review each application for entry into the regulatory sandbox on a rolling basis.
C. An application must demonstrate that an applicant both:
1. Is an entity or individual that is subject to the jurisdiction of the attorney general through incorporation, residency, presence agreement or otherwise.
2. Has established a location, whether physical or virtual, that is adequately accessible to the attorney general, from which testing will be developed and performed and where all required records, documents and data will be maintained.
D. Persons that already possess a license or other authorization under state laws that regulate a financial product or service or other innovation must file an application with the attorney general to test an innovation within the regulatory sandbox for a product or service or other innovation outside the scope of the license or authorization.
E. Applications must contain sufficient information to demonstrate that an applicant has an adequate understanding of the innovation and a sufficient plan to test, monitor and assess the innovation while ensuring consumers are protected from a test’s failure.
F. Applications must contain the information required by a form that is developed and made publicly available by the attorney general. The information required by the form may include:
1. Relevant personal and contact information for the applicant, including full legal names, addresses, telephone numbers, email addresses, website addresses and other information that the attorney general deems necessary.
2. Disclosure of any criminal convictions of the applicant or key personnel, if any.
3. A description of the innovation desired to be tested, including statements regarding all of the following:
(a) How an innovation is subject to regulation outside of the regulatory sandbox.
(b) How the innovation would benefit consumers.
(c) How the innovation is different from other financial products or services or other innovations available in this state.
(d) What risks will confront consumers.
(e) How entering the regulatory sandbox would enable a successful test of the innovation.
(f) A description of the proposed testing plan, including estimated time periods for market entry, market exit and the pursuit of necessary licensure or authorization.
(g) How the applicant will wind down the test and protect consumers if the test fails.
(h) How the applicant will employ cybersecurity measures to avoid breaches and protect consumer and transaction data.
G. The attorney general shall collect an application fee in an amount to be determined by the attorney general. The attorney general shall deposit, pursuant to sections 35-146 and 35-147, all fees collected pursuant to this subsection in the consumer protection-consumer fraud revolving fund established by Section 44-1531.01.
H. A person shall file a separate application for each innovation sought to be tested.
I. After the information required by subsection F of this section is submitted, the attorney general may seek additional information that it deems necessary. Not later than ninety days after an application is initially submitted, the attorney general shall notify the applicant as to whether the application is approved for entry into the regulatory sandbox. The attorney general and an applicant may mutually agree to extend the time period for the attorney general to determine whether an application is approved for entry into the regulatory sandbox.
J. The attorney general may deny applications in its discretion and a denial is not an appealable agency action for the purposes of chapter 6, article 10 of this title.