The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: SB 1390
INTRODUCER: Senator Martin
SUBJECT: Universal Regulatory Sandbox
DATE: March 17, 2023 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McMillan McKay CM Favorable
2. ATD
3. FP
I. Summary:
SB 1390 creates ss. 288.9971-288.9983, F.S., to establish a universal regulatory sandbox, which
allows businesses, to demonstrate innovative products, services, and business models while
temporarily receiving a waiver or suspension of state laws or regulations.
The bill creates the Office of Regulatory Relief within the Department of Economic Opportunity
to administer the universal regulatory sandbox and to act as a liaison between private businesses
and applicable agencies to identify laws or regulations that could be waived or suspended for one
year under the regulatory sandbox. The bill also creates the General Regulatory Sandbox
Program Advisory Committee to advise and make recommendations to the office. Additionally,
the bill provides the following:
 The scope of the regulatory sandbox;
 An annual report requirement to the President of the Senate and the Speaker of the House of
Representatives;
 Consumer protection requirements;
 Requirements for exiting the regulatory sandbox; and
 Record keeping and reporting requirements.
The bill takes effect July 1, 2023, only if SB 1392 or similar legislation takes effect and if such
legislation is adopted in the same legislative session or an extension thereof and becomes a law.
SB 1392 creates a new public records exemption and an open meeting exemption for information
in a regulatory sandbox application that the office reasonably believes could result in economic
harm to the applicant.
BILL: SB 1390 Page 2
II. Present Situation:
Florida’s Financial Technology Sandbox
In 2021, the Financial Technology Sandbox (sandbox) was created within the Office of Financial
Regulation (OFR) to allow financial technology innovators to test new products and services in a
supervised, flexible regulatory sandbox using exceptions to specified general law and waivers of
the corresponding rule requirements under defined conditions.1
The sandbox allows a licensee2 to make an innovative3 financial product4 or service available to
consumers during a period that is initially 24 months but which can be extended one time for an
additional 12 months.5
A sandbox licensee must be a domestic corporation or other organized domestic entity with a
physical presence, other than that of a registered office or agent or virtual mailbox, in Florida.6
Upon approval of a sandbox application certain rules and requirements are not applicable to the
sandbox licensee during the sandbox period.7
The OFR may approve a sandbox application if one or more of the general laws enumerated in s.
559.952 (4)(a), F.S., prevent the innovative financial product or service from being made
available to consumers and if all other requirements of the sandbox are met.8
A sandbox licensee may conduct business through electronic means, including through the
Internet or a software application.9
Section 559.952 (5), F.S., provides rules for filing a sandbox application, as well as, standards
that the OFR must follow while considering an application. The OFR is prohibited from
approving an application in the following circumstances:
 The applicant had a prior sandbox application that was approved and that related to a
substantially similar financial product or service;
 Any control person of the applicant was substantially involved in the development, operation,
or management with another sandbox applicant whose application was approved and whose
application related to a substantially similar financial product or service; or
1
See s. 559.952, F.S. See also Office of Financial Regulation, Financial Technology Sandbox Innovator, available at
https://flofr.gov/sitePages/FinancialTechnologySandbox.htm (last visited Mar. 17, 2023).
2
"Licensee" means n a business entity that has been approved by OFR to participate in the Financial Technology Sandbox.
See s. 559.952 (3)(i), F.S.
3
“Innovative” means new or emerging technology, or new uses of existing technology, which provide a product, service,
business model, or delivery mechanism to the public and which are not known to have a comparable offering in Florida
outside of the Financial Technology Sandbox. See Section 559.952 (3)(h), F.S.
4
A “financial product or service” is a product or service related to a consumer finance loan, money transmitter, or payment
instrument seller, including mediums of exchange that are in electronic or digital form. See s. 559.952 (3)(f), F.S.
5
See s. 559.952, F.S.
6
Section 559.952 (3)(a), F.S.
7
See s. 559.952 (4)(a), F.S.
8
Section 559.952 (4)(b), F.S.
9
Section 559.952 (4)(c), F.S.
BILL: SB 1390 Page 3
 The applicant or any control person has failed to affirmatively demonstrate financial
responsibility.10
For businesses whose sandbox application is approved, the OFR must specify the maximum
number of consumers authorized to receive an innovative financial product or service, after
consultation with the sandbox applicant. The OFR may not authorize more than 15,000
consumers to receive the financial product or service until the sandbox licensee has filed the first
report required under the sandbox. After the filing of the report, if the licensee demonstrates
adequate financial capitalization, risk management processes, and management oversight, the
OFR may authorize up to 25,000 consumers to receive the financial product or service.11
Additionally, s. 559.952 (6), F.S., requires the licensee to provide certain disclosures to a
consumer before the consumer purchases, uses, receives, or enters into an agreement to purchase,
use, or receive an innovative financial product or service through the sandbox.
A sandbox licensee must submit a report to the OFR twice a year, and the report must, at a
minimum, include financial reports and the number of consumers who have received the
financial product or service.12
A sandbox licensee remains subject to civil damages for acts and omissions arising from or
related to any innovative financial product or services provided or made available by the licensee
or relating to the sandbox, and all criminal and consumer protection laws and any other statute
not specifically exempt under the sandbox.13 Further, the OFR may, by order, revoke or suspend
a licensee’s approval to participate in the sandbox.14
Regulatory Sandboxes Generally
The UK Financial Conduct Authority (FCA) is credited with establishing the first formal
regulatory sandbox, and although there is not a uniform definition of a regulatory sandbox, the
FCA has defined it as “a safe space in which businesses can test innovative products, services,
business models and delivery mechanisms without immediately incurring all the normal
regulatory consequences of engaging in the activity in question.”15 In the United States (U.S.),
the Consumer Financial Protection Bureau was the first regulatory agency to set up a dedicated
fintech office to study fintech and provide assistance to promote consumer friendly innovation.16
States in the U.S., such as Arizona, Kentucky, and Vermont have industry-specific regulatory
sandboxes.17 In 2021, Utah was the first state to create a general sandbox program.18
10
Section 559.952(5)(d), F.S.
11
Section 559.952(5)(f), F.S.
12
Sectrion 559.952(8), F.S.
13
Section 559.952(10), F.S.
14
Id.
15
See Stanford Center on Philanthropy and Civil Society, A Few Thoughts on Regulatory Sandboxes, available at
https://pacscenter.stanford.edu/a-few-thoughts-on-regulatory-sandboxes/ (last visited Mar. 17, 2023).
16
Id.
17
See State Policy Network, How Many States Have Regulatory Sandboxes?, available at https://spn.org/articles/what-is-a-
regulatory-sandbox/ (last visited Mar. 17, 2023)
18
Matthew Nicaud, Regulatory “Sandbox” Reforms Advance Across the Nation (June 23, 2021), available at
https://mspolicy.org/regulatory-sandbox-reforms-advance-across-the-nation/ (last visited Mar. 17, 2023).
BILL: SB 1390 Page 4
III. Effect of Proposed Changes:
Universal Regulatory Sandbox
The bill creates ss. 288.9971-288.9983, F.S., to establish a universal regulatory sandbox, which
allows businesses, under the observation of regulators, to demonstrate innovative products,
services, and business models while temporarily receiving a waiver or suspension of inapplicable
laws or regulations.
The bill provides the following definitions:
 “Advisory committee” means the General Regulatory Sandbox Program Advisory Committee
created in s. 288.9974, F.S.;
 “Applicable agency” means a department or agency of Florida that regulates a business activity
and persons engaged in such business activity, including the issuance of licenses or other types of
authorization, which the office determines would otherwise regulate a sandbox participant;
 “Applicant” means a person who applies to participate in the regulatory sandbox;
 “Blockchain technology” means the use of a digital database containing records of financial
transactions, which can be simultaneously used and shared within a decentralized, publicly
accessible network and can record transactions between two parties in a verifiable and permanent
way;
 “Consumer” means a person who purchases or otherwise enters into a transaction or agreement to
receive an offering pursuant to a demonstration by a sandbox participant;
 “Demonstrate” or “demonstration” means to temporarily provide an offering in accordance with
the General Regulatory Sandbox Program created in s. 288.9975, F.S.;
 “Director” means the director of the Office of Regulatory Relief;
 “Financial product or service” has the same meaning as in s. 559.952(3), F.S.;19
 “Innovation” means the use or incorporation of a new or existing idea, a new or emerging
technology, or a new use of existing technology, including blockchain technology, to address a
problem, provide a benefit, or otherwise offer a product, production method, or service;
 “Insurance product or service” means an insurance product or insurance service that requires
state licensure, registration, or other authorization under the Florida Insurance Code, including an
insurance product or insurance service that includes a business model, delivery mechanism, or
element that requires a license, registration, or other authorization to engage in an insurance
business, act as an insurance producer or consultant, or engage in insurance adjusting;
19
Section 559.952(3), F.S., defines “financial product or service” as a product or service related to a consumer finance loan,
as defined in s. 516.01, or a money transmitter or payment instrument seller, as those terms are defined in s. 560.103,
including mediums of exchange that are in electronic or digital form. Section 516.01, F.S., defines “consumer finance loan”
as a loan of money, credit, goods, or choses in action, including, except as otherwise specifically indicated, provision of a line
of credit, in an amount or to a value of $25,000 or less for which the lender charges, contracts for, collects, or receives
interest at a rate greater than 18 percent per annum. Section 560.103, F.S., defines “money transmitter” as means a
corporation, limited liability company, limited liability partnership, or foreign entity qualified to do business in this state
which receives currency, monetary value, a payment instrument, or virtual currency for the purpose of acting as an
intermediary to transmit currency, monetary value, a payment instrument, or virtual currency from one person to another
location or person by any means, including transmission by wire, facsimile, electronic transfer, courier, the Internet, or
through bill payment services or other businesses that facilitate such transfer within this country, or to or from this country.
The term includes only an intermediary that has the ability to unilaterally execute or indefinitely prevent a transaction, and
“payment instrument seller” as a corporation, limited liability company, limited liability partnership, or foreign entity
qualified to do business in this state which sells a payment instrument.
BILL: SB 1390 Page 5
 “Offering” means a product, production method, or service, including a financial product or
service or an insurance product or service that includes an innovation;20
 “Office” means the Office of Regulatory Relief created in s. 288.9973, F.S.;
 “Product” means a commercially distributed good that is tangible personal property, the result of
a production process, or passed through the distribution channel before consumption;
 “Production” means the method or process of creating or obtaining a good, which may include
assembling, breeding, capturing, collecting, extracting, fabricating, farming, fishing, gathering,
growing, harvesting, hunting, manufacturing, mining, processing, raising, or tapping a good;
 “Regulatory sandbox” means the General Regulatory Sandbox Program created in s. 288.9975,
F.S., which allows a person to temporarily demonstrate an offering under a waiver or suspension
of one or more state laws or regulations;
 “Sandbox participant” means a person whose application to participate in the regulatory sandbox
is approved in accordance with this bill;
 “Secretary” means the Secretary of Economic Opportunity; and
 “Service” means any commercial activity, duty, or labor performed for another person.
Office of Regulatory Relief
The bill creates the Office of Regulatory Relief (office) within the Department of Economic
Opportunity (DEO). The office must be administered by a director, and the director must report
to the secretary. Additionally, the director, with the approval of the secretary, is authorized to
appoint a staff.
The bill provides that the office must do the following:
 Administer the office as provided in the bill;
 Administer the regulatory sandbox; and
 Act as a liaison between private businesses and applicable agencies to identify laws or
regulations that could be waived or suspended under the regulatory sandbox.
The bill authorizes the office to do the following:
 Review laws and regulations that may unnecessarily inhibit the creation and success of new
companies or industries and provide recommendations to the Governor and the Legislature
on modifying or eliminating such laws and regulations;
 Create a framework for analyzing the risk level to the health, safety, and financial well-being
of consumers related to permanently modifying or eliminating or temporarily waiving or
suspending laws and regulations inhibiting the creation or success of new and existing
companies or industries;
 Propose potential reciprocity agreements between states that use or are proposing to use
similar regulatory sandboxes as created in this bill or the Financial Technology Sandbox
created in s. 559.952, F.S.; and
 In accordance with ch. 120, F.S., and this bill, adopt rules regarding the following:
o Administering the regulatory sandbox;21 and
20
The term does not include any service for which a license or authorization to practice law in this state is required under ch.
454, F.S.
21
Administering the regulatory sandbox includes adopting rules regarding the application process and the reporting
requirements of sandbox participants.
BILL: SB 1390 Page 6
o Cooperating and consulting with other applicable agencies that administer regulatory
sandboxes.
Advisory Committee
The bill creates the General Regulatory Sandbox Program Advisory Committee (committee) to
make recommendations to the office, and provides that it must consist of the following 11
members:
 Six members who represent business interests from a variety of industries, appointed by the
director;
 Three members who represent applicable agencies regulating businesses, ap