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Sponsor License Agreement

A sponsor license agreement is a legally binding agreement between a financial institution or other organization (the sponsor) and a regulatory agency, such as a central bank or other financial regulator. It sets out the terms and conditions under which the sponsor will provide support for the development and launch of a new financial product or service, or for the expansion of an existing one.

The purpose of a sponsor license agreement is to establish a clear understanding between the sponsor and the regulatory agency regarding the roles, responsibilities, and obligations of each party in relation to the sponsored financial product or service. It may be used to provide regulatory approval or license for the product or service, and to set out any requirements or conditions that must be met in order to maintain that approval or license.

The contents of a sponsor license agreement may vary depending on the specific terms and conditions agreed upon by the parties involved. However, it may typically include provisions related to the scope and nature of the support being provided by the sponsor, any financial or other obligations of the sponsor, and any other terms and conditions that are relevant to the sponsorship arrangement. The agreement may also include provisions related to the confidentiality of information shared between the parties, and any other legal or regulatory considerations that are applicable to the sponsorship arrangement.

This page was last updated on January 7, 2023.