switzerland regulators revisions fintech

Switzerland continues to be a place of financial prosperity. Equipped with a progressive government and a knack for innovation, the country has obtained top honors in both in the Global Innovation Index 2016 and the World Economic Forum’s Global Competitiveness Index 2016-2017. This economic success has attracted a fleet of fintech companies to Zug – Switzerland’s pro-fintech “Crypto Valley.”

In February 2017, Switzerland’s Federal Council proposed three amendments to the Banking Act (BankA) and Banking Ordinance (BankO). The consultation, which ends on May 8, 2017, is an effort to streamline entry of firms into the fintech market, boost competitiveness, and maximize growth.

First, the Federal Council has proposed an exception to the BankO for the acceptance of settlement funds. Currently, market participants without a banking license must apply explicitly for third party settlement funds within seven days. However, the Federal Council is pushing for an amendment to the BankO that would extend the period to 60 days.

The Federal Council has also proposed that “an innovation area” or sandbox should be created that would exempt companies from having to obtain banking licenses when accepting up to one million Swiss francs ($1 million) in client deposits. The Federal Council encourages companies to test their business models before they’re required to obtain proper authorization from the Swiss Financial Market Supervisory Authority (FINMA), the Swiss government body responsible for financial regulation.

Lastly, the Federal Council is advocating for less stringent accounting requirements on minimum capital, personal funds, and liquidity. This would enable financial innovators not actively engaged in lending and that accept deposits up to a maximum amount of 100 million Swiss francs ($100 million) to apply for “light” banking licenses. All prospective changes will be consistent with future regulation proposals.

The Federal Council has recommended flexibility in regulation, which will enable evolving business models like the DAO and ICOs to function as large contributors to the financial sector.

“Due to the rapidly progressing digitisation in the financial sector, in particular in the blockchain area, it can be assumed that business models will develop which are not yet conceivable today.”

Dan is a Los Angeles-based musician, writer, and veteran passionate about science and technology, current events, human rights, economic impacts, and strategic calculus.
ETHNews is commited to its Editorial Policy
Like what you read? Follow us on to receive the latest on Switzerland, fintech or other Ethereum law and legislation news.
   

Subscribe to our Newsletter

* indicates required
Email Address *
First Name
Last Name
Country
News Categories of Interest