The Swiss Federal Council has adopted new light-touch regulations for fintech firms aimed at bolstering business and competitiveness for the burgeoning sector. They come into force on August 1, 2017.
The amendments to the Banking Act and Banking Ordinance should help reduce barriers to market entry and provide more legal certainty for fintech start-ups, which could eventually enhance the position of the Swiss financial centre.
The new rules set a deadline of 60 days for holding money in settlement accounts, instead of only seven days as was the practice up to now, facilitating crowdfunding services.
Viberate Teams Up with Blockparty to Deliver World’s First Live Event NFTGo to article >>
Furthermore, the Swiss authority has created an ‘innovation area’ in which a provider can accept up to 1 million francs from public funds without being monitored by industry watchdog FINMA.
Explaining this point, the Federal Council said: “The acceptance of public funds up to CHF 1 million should not be classified as operating on a commercial basis and can be exempt from authorisation. This change should allow firms to try out a business model before they are finally required to obtain authorisation in the case of public funds of over CHF 1 million.” It added that investors should be aware that their deposits are not protected by traditional depositor protection systems.
Finally, the Federal Council noted that parliament has already passed amendments to the Banking Act which created better operating requirements, relative to the current banking licence, for institutions which are restricted to taking deposits of up to 100 million francs but do not operate in the lending business.