The Financial Markets Authority (FMA) has published its report on the outcomes of its fintech regulatory sandbox pilot, together with its medium-term strategy for supporting innovation in New Zealand's financial markets. Launched in April 2025, the pilot represented a significant step in demonstrating the FMA's commitment to encouraging growth and innovation in the financial services sector. The report draws on regulatory and operational learnings from the pilot and sets out the FMA’s strategic approach for the next 18 to 24 months.
The report is available here.
Who needs to read it?
This report is highly relevant for any financial services firm pursuing innovative business models, including mature fintechs and those at the start-up or growth stage, firms operating in the virtual assets, tokenisation, payments or artificial intelligence sectors, and international firms looking to bring products and services to New Zealand. It signals the FMA's intended regulatory direction and emerging pathways to market that these firms will want to understand.
What does it cover?
Six innovative firms were selected to participate in the pilot cohort, five of which we advised through the sandbox process. The participants and their proposed innovations are summarised below:
| Tandym | Tandym provides a platform enabling friends, family and colleagues to form groups and invest together. The platform aims to remove the administrative friction that has historically made group investing burdensome. |
| Homeshare | Homeshare provides a fractionalised real estate product to retail investors through a digital platform and a secondary market. |
| Invest Inya Farmer (IIF) | IIF operates a novel agricultural investment platform connecting investors and farmers through the digitisation of real agricultural assets, including livestock, crops, and aquaculture. This model enables investors to access and participate in the vital agricultural sector. The FMA sandbox supported IIF in exploring how this model can operate within New Zealand’s regulatory framework. |
| Emerge | Emerge, a digital banking alternative offering products such as debit cards, current accounts, and in-app expense tracking, proposed to test new products that would provide customers with access to higher yields and returns. |
| ECDD Holdings Ltd | ECDD Holdings Limited (part of the cryptocurrency platform, Easy Crypto) proposed launching a yield-bearing NZD-backed stablecoin, which generated revenue from interest earned on money held on trust in interest-bearing accounts. |
| IndigiShare | IndigiShare aims to improve access to capital for Māori entrepreneurs and small businesses. It seeks to offer Te Whare Manaaki (a koha loan platform), as a way to lower barriers to entry for indigenous businesses and enable community entrepreneurship. |
The report sets out the following key regulatory learnings from the FMA:
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One-size-fits-all approach is a barrier to entry: The pilot enabled the FMA to better understand how “one-size-fits-all” requirements for licensed entities are not always well suited to start-ups and can, in some cases, be prohibitive to market entry.
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Virtual assets: The pilot provided an opportunity to explore the specific challenges firms face in relation to the legal characterisation and regulatory treatment of virtual assets.
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Regulatory clarity on complex issues: The pilot contributed to a clearer understanding of several emerging issues, including the payments and e-payments landscape, the potential limitations of bare trust arrangements and their relationship to the Depositor Compensation Scheme, tokenisation and stablecoin models, and how Māori start-ups interact with current financial markets regulation.
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Engagement was valued: Participants expressed strong satisfaction with the quality and consistency of their engagement with the FMA, and valued the open communication between themselves, their legal advisers, and FMA subject matter experts.
Looking ahead, the FMA's workplan for the next 18 to 24 months is based on four strategic pillars. The most significant developments include:
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Expanding the sandbox and introducing an on-ramp licence: The FMA intends to continue running the sandbox, expand the initiative to further reduce unnecessary regulatory burden, and establish an on-ramp licence to facilitate a proportionate pathway to market.
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Domestic and international engagement: The FMA intends to develop an ongoing domestic Innovation Forum with key stakeholders to continue to improve its understanding of regulatory barriers faced by the market.
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Thematic exploration: The FMA will continue to engage with industry about tokenisation and market infrastructure, and develop a multi-year work programme for virtual assets and payment service providers. Following the Access to Advice Report published in March 2026, the FMA will also progress thematic work on the use of artificial intelligence in the financial advice sector.
Our view
Having advised five of the six participants in the pilot cohort, we are uniquely positioned at the forefront of this emerging regulatory landscape. The sandbox has been a welcome development for New Zealand's financial services market, delivering meaningful outcomes for most of the participants. This includes first-of-their-kind exemptions and licences granted under the sandbox framework, and a designation of a kind not previously seen in New Zealand in relation to a payment stablecoin. These developments signal the FMA's genuine intent to encourage innovation in the sector.
We agree with the FMA that applying standard “one-size-fits-all” licensing requirements is a significant structural barrier to fintech innovation in New Zealand. The FMA's proposal to establish an on-ramp licence is, in our view, the most consequential development to emerge from the pilot. A graduated licensing pathway will materially reduce the cost and complexity of market entry for fintechs, providing regulatory certainty without stifling the pace of innovation. This is precisely the kind of proportionate, outcomes-focused regulatory reform that New Zealand's financial markets need. More broadly, a sustained and purpose-built sandbox programme, coupled with a licensing regime designed with fintechs in mind, has the potential to position New Zealand as a genuinely attractive jurisdiction for financial services innovation. We look forward to further developments from the FMA on this front and are committed to contributing to the design of this framework, as well as advising clients who stand to benefit from the initiative.
We also strongly support the FMA's thematic exploration of virtual assets, payments, and the use of artificial intelligence in financial services. These are areas of considerable market activity and regulatory complexity, and sustained engagement will be critical to ensuring that New Zealand's regulatory settings remain fit for purpose.
What next?
If you have any questions about the FMA's fintech regulatory sandbox, or would like to discuss how these developments may affect your business, please get in touch with one of our experts below.
This article was co-authored by Olivia Maher (Solicitor), in our Financial Services team.
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