New Zealand’s Financial Markets Authority (FMA) has released the results of its fintech regulatory sandbox pilot alongside a forward work plan built around four strategic priorities: expanding its sandbox programme, deepening engagement with virtual assets and payments, examining how artificial intelligence is being used in financial advice, and broadening access to regulatory education for market participants.
The report, titled “Supporting Innovation in New Zealand’s Financial Markets” and published May 27, 2026, marks the formal conclusion of a pilot phase that began in December 2024. The FMA took on the work at the direction of the Minister of Commerce and Consumer Affairs, after a coalition of industry participants put forward a joint proposal in October 2024 calling for a structured regulatory testing environment for the fintech sector.
The FMA received 24 expressions of interest before the application window closed in February 2025. Most applicants (22 of 24) were early-stage start-ups, with two firms in a growth phase and one with an established market position. In terms of where products stood at the time of application, 15 firms had built a working prototype, four had a market-ready product, and five had not moved beyond the conceptual stage. The mix of products submitted spanned several categories. Business-to-business offerings included Know Your Customer (KYC) and anti-money laundering compliance tools, software platforms designed to streamline financial advice processes, and AI-driven accounting tools.
Other applicants proposed tokenised versions of real-world assets such as real estate, along with payment solutions for consumers and merchants, a New Zealand dollar-backed stablecoin, a group investment platform, and an agricultural investment product. A subset of applications addressed financial access for retail customers who have historically had limited options in the market. After an initial screening against eligibility criteria by the FMA’s Sandbox Working Group, nine applicants were interviewed. The authority ultimately admitted six firms into the pilot, with final decisions made by a Sandbox Governance Committee.
The exercise gave the FMA a clearer picture of where its existing regulatory framework creates friction for smaller or newer entrants. The authority found that uniform licensing requirements –designed for established financial service providers – do not map well onto start-ups trialling untested business models. In some cases, those requirements acted as a deterrent to market entry. The pilot also surfaced questions the FMA had not previously examined in depth. These included the regulatory treatment of virtual assets, the structure of the payments and e-payments landscape, whether bare trust arrangements are appropriate vehicles for certain fintech products and how they interact with the Depositor Compensation Scheme, and the mechanics of stablecoin and tokenisation models. Separately, the process exposed a gap specific to Māori businesses: current financial markets law does not adequately account for tikanga – the customary values and protocols that underpin how many Māori enterprises operate – and small Māori businesses face particular difficulties accessing capital.
When surveyed, all six participating firms said the programme was useful. They reported that working directly with dedicated FMA subject matter expert teams helped them move faster toward a market launch than they could have on their own. Where regulatory barriers were confirmed, several firms were able to obtain temporary relief through exemptions or no-action letters. The FMA noted that early-stage workshops allowed some firms to refine their business models within weeks rather than months. The authority also took stock of what it could do differently. It acknowledged that clearer role definitions at the start of the process, earlier involvement from across its teams, and a longer planning window would reduce friction in future cohorts – both for participating firms and for FMA staff carrying sandbox responsibilities alongside their regular workloads.
Drawing on what it learned during the pilot, the FMA has set out a work programme covering the next 18 to 24 months, organised around four areas. The first is continuing and expanding the sandbox itself. The FMA said it will keep accepting firms into the programme and intends to introduce an on-ramp licence – a scaled-down authorisation pathway calibrated to the size and risk profile of early-stage entrants. Its Innovation Hub drop-in service, where firms can seek informal regulatory guidance, will also continue. The second area is stakeholder engagement. Domestically, the FMA plans to establish a standing Innovation Forum to maintain dialogue with industry on where the regulatory settings are creating unnecessary difficulty. Internationally, it said it will contribute to discussions with counterpart regulators and associations on topics relevant to New Zealand’s market.
The third area covers two thematic investigations. On virtual assets and payments, the FMA will develop a multi-year work programme drawing on responses to its Tokenisation in Financial Markets discussion paper and feedback gathered through direct firm contact. On AI, the authority said it will build on its Access to Advice Report, published in March 2026 by examining how artificial intelligence tools are being used in financial advice – through both dedicated roundtables and direct engagement with firms already deploying the technology. The fourth area is market education. The FMA said it will work alongside programmes such as Creative HQ’s Fintech Lab and Ignite to support firms entering the regulated environment, update its public-facing information, and publish insights from its regulatory activities.
The sandbox moved through several stages between its December 2024 launch and the publication of this report. The FMA named the six accepted participants in April 2025. Two months later, it published its first Financial Conduct Report, which set reducing regulatory burden through the sandbox as a stated priority for the 2025-26 period. By December 2025, the authority had issued its first exemption and licence under the pilot, and one firm had left the programme to begin trading. In March 2026, the FMA announced a stablecoin designation and an on-ramp licence. The FMA’s mandate to promote fair, efficient, and transparent financial markets is set out in the Financial Markets Conduct Act 2013, which also lists the promotion of innovation and flexibility in financial markets as one of the Act’s purposes.
