The Guangdong-Hong Kong-Macau Bay Area should set up a “Regulatory Sandbox” system to promote financial development and innovation, said Liu Mingkang, former chairman of the China Banking Regulatory Commission, Yicai.com reported.

“Regulatory Sandbox” means a trial zone where new businesses can bypass regulations and constraints on new products and services.

Such areas can encourage FinTech startups to boldly experiment innovative products, services, business models, the report said.

“The best practice is that regulators and market players can participate in the experiment inside the sandbox,” said Liu, “so that they can (develop) forward-looking design rules and systems to avoid any crisis.”

Liu thinks the bay area should be the pioneer for setting up the Regulatory Sandbox, in order to provide a platform for business in Hong Kong and Shenzhen.