NY A09899

Establishes a regulatory sandbox program administered by the Attorney General and State Comptroller allowing persons to test financial technology products and services for up to 24 months without obtaining a license or paying licensing fees.

Restricts sandbox participants to a maximum of 10,000 consumers and limits money transmitter transactions to $10,000 per transaction and $2 million aggregate per consumer over 24 months, unless the participant demonstrates adequate capitalization and risk management.

Requires sandbox participants to disclose to consumers that the product or service is a temporary test, is not state-endorsed, and provide registration number and contact information for filing complaints.

Mandates all sandbox participants be audited by third-party depository or custodian services to ensure security protocols, maintain insurance through the Securities Investor Protection Corporation, and verify proper asset ownership.

Requires sandbox participants to exit the program within 60 days of the 24-month testing period ending unless they seek an extension to pursue licensure, and imposes data breach notification requirements and consumer fraud liability.