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Guidance Note: flexibility in ring-fencing and sandboxing waiver pathways

Ring-fencing and regulatory sandboxing are two regulatory tools that the AER can use to allow for exceptions to be made from regulatory requirements where good reason exists to grant them. Both ring-fencing and sandboxing frameworks offer waivers, but these waivers have different functions and considerations.

There are circumstances in which distribution network service providers (DNSPs) may be unclear on which waiver function to apply for to facilitate delivery of an innovative project or service. 

The AER is now open to receiving applications under either of these two regulatory waiver pathways, as is set out in this guidance note.

In the current regulatory and commercial context of increased interest in regulatory sandboxing waivers and the advent of Policy-led Sandboxing, we wish to clarify that we are open to considering ring-fencing waiver applications through the regulatory sandbox, even where the waiver relates only to ring-fencing requirements. DNSPs can elect to submit applications for waivers via either the regulatory sandboxing or ring-fencing frameworks.

The below Guidance Note outlines some of the differences between these two frameworks. DNSPs are encouraged to carefully consider whether a ring-fencing or a sandboxing waiver is more appropriate to the needs of their business and project, and should obtain independent legal advice if necessary.  

AER staff can provide general information only about the two respective frameworks and are not able to provide indications of relative likelihood for success under each pathway. 

More information is available in our Guidance Note. 

Guidance Note - Regulatory sandboxing as an avenue for innovative ringfencing waivers - August 2025.pdf (pdf 162.42 KB)