(1)An applicant, seeking to participate in a regulatory sandbox, shall tender an application to the Sandbox Operator, in the Form B.
(2) The applicant shall, along with the application, tender a processing fee of an amount provided in Annexure II, through demand draft or e-payment.
(3) Where the Sandbox Operator is of the view that an application is incomplete on any of the material particulars required, or seeks further information from the applicant, it shall return the same to the Applicant with a written order indicating the deficiencies in the application.
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(4) In assessing the applications received, the Sandbox Operator may consult the Authority from time to time.
(5) Upon satisfaction of the application requirements, the Sandbox Operator shall intimate the successful applicant, if any, of its approval in writing within seven days from the date of its decision. A copy of the approval shall be sent to the Technical Secretariat.
(6) All applications received by the Sandbox Operator for participation in a Regulatory Sandbox under section 14 shall be published on the website of the Authority and the Sandbox Operator respectively within thirty days of receipt of such application, subject to the confidentiality requirements provided in section
23.
8. Terms and Conditions for participants in the Regulatory Sandbox.
(1) In addition to the terms and conditions provided in sub-section (2) of section 12, every participant in the Regulatory Sandbox shall follow terms and conditions provided in these rules.
(2) The terms and conditions shall be as follows, namely:–
(a) The benefits conferred due to the participation in the regulatory sandbox are only applicable to the product, service or solution to the extent that they are offered or provided in the state of Karnataka.
(b) The participants of the regulatory sandbox are required to maintain transparency with the Sandbox Operator and Authority in relation to the proposed innovation during and after completion of participation in the sandbox. In case of any new information that will affect the terms of the participation in the regulatory sandbox of the participant, such information must be shared with the Sandbox Operator immediately.
(c) The participant must provide an undertaking that they shall be responsible for complying with all applicable legal and regulatory obligations during the term of the sandbox.
(d) The participant must undertake to comply with the safeguards built into the sandbox to protect the rights of the consumers, which may 9 include but are not limited to, mandatory disclosures of risks to customers, protecting data privacy, requirements for obtaining consumer consent, taking out indemnity insurance, making arrangements to adequately compensate the test subjects for any losses suffered in connection with particular tests, compliance with dispute and grievance redressal conditions.
(e) The participants must, in an upfront and transparent way, notify test customers of potential risks that may arise, the available compensation and obtain their explicit consent in this regard. They must also provide an appropriate arrangement for customers to withdraw from the test.
(f) The participant shall be required to take liability or indemnity insurance of an adequate amount and period to safeguard the interest of the customers. The adequacy of indemnity cover shall depend on determination of the maximum liability based on, among others,-
(i) maximum exposure to a single customer;
(ii) the number of claims that will arise from a single event (potential for multiple claims); and
(iii) number of claims that might be expected during the policy period.
The policy cover shall begin with the start of testing stage and end three months after the exit of the participant from the Regulatory Sandbox.
(g) The participant shall not be in violation of any Acts or Rules or notifications passed by the Central or State Government. In any instance, where the participant in a regulatory sandbox violates any law in force outside the scope of the regulatory sandbox, action shall be taken by the concerned competent authority in accordance with law.
(h) Unless otherwise extended by the Authority, subject to subsection (2) of section 12, the participant’s involvement terminates on the expiry of the agreed upon term under the Sandbox Plan.
(i) In the event that there is no agreed upon term, the Authority shall notify in writing its intent to end the sandbox and any participation in the sandbox shall automatically cease with immediate effect.
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(j) The participant must clearly identify to the Sandbox Operator and the Authority, in writing, which information provided to them is confidential information, providing clear reasons as to why such information is deemed confidential. Such information shall be covered under section 23.
(k) The participant shall retain all intellectual property rights in, and responsibility for, all content and materials that they contribute to the sandbox, provided that the participant shall only contribute such intellectual property that they have the right to share, use and develop and are in compliance with third party licenses, if any.
(l) The participant or the Sandbox Operator may at any time, on providing two weeks’ notice in writing, terminate the involvement of the participant in the sandbox.
(3) The participant must undertake to disclose at the application stage, as and when it may arise, any actual or potential conflict of interest, in the form of any connections or associations between the participant and their employees with individuals associated with the Sandbox Operator and the Authority, which may include,–
(a) spouses, partners, children, parents or other relatives;
(b) business partners, employees, managers or directors; or
(c) any former member of the staff of the Sandbox Operator or the Authority who is currently employed by the participant, appointed to the board, or has a substantial interest in the participant.
(4) The Sandbox Operator may at any time revoke, with immediate effect, the involvement of a participant in the sandbox and cease providing any regulatory support if –
(a) there is a conflict of interest as provided in sub-rule (3);
(b) the participant commits a material or repeated breach of the Sandbox Plan or the terms and conditions, which cannot be remedied; or 11
(c) the Authority determines that the conduct of the participant, either in the course of or outside the sandbox, is contrary to public interest:
Provided that, the Sandbox Operator shall not revoke the participation of a participant in the sandbox for any of the reasons specified in this sub-rule unless the participant in the sandbox has been given an opportunity of being heard as to why such participation shall not be revoked.
(5) The terms and conditions for participants in the regulatory sandbox may be subject to further addition by the Authority through regulations, at any time.