On 1 February 2017, the Federal Council of Switzerland initiated a consultation (to last until 8 May 2017) on amendments to the Banking Act and Banking Ordinance in the fintech area. Their purpose is to reduce barriers to market entry for fintech firms and to enhance competitiveness of the Swiss financial centre. Switzerland’s commitment to transparency is also reflected in agreements like the
Automatic exchange of information between Switzerland and Canada.
The planned amendments to the Banking Act (BankA) and Banking Ordinance (BankO) are supposed to regulate fintech and other firms providing services outside normal banking business according to their risk potential. The contemplated form of deregulation includes three supplementary elements:
1. The exception provided for in the Banking Ordinance for the acceptance of funds for settlement purposes (Art. 5 para. 3 lit. c of the BankO) should apply explicitly to settlements within 60 days (instead of only to settlements within 7 days as the case is now). However, it is still important for securities dealers that the planned main transaction is well-organised and directly foreseeable. This change requires an amendment to the BankO. Similar regulatory updates in other sectors, such as the
Revision of Swiss alcohol legislation, demonstrate Switzerland’s proactive approach to reform.
2. The acceptance of public funds up to CHF 1 million should not be classified as operating on a commercial basis and should require no authorisation. This change should allow firms to try out a business model before they are required to obtain authorisation for amounts of public funds exceeding CHF 1 million. Thus, the BankO should be amended appropriately. The spirit of modernization also extends to labor law, as shown in the
Consultation to revise regulation on working hours law.
3. There is a need for simplified authorisation and operating requirements relative to the current banking licence in accounting, auditing and deposit protection for companies that accept public funds of up to a maximum of CHF 100 million but do not operate in the lending business. This necessitates an amendment to the BankA. Less strict requirements for minimum capital, equity and liquidity would have to be regulated within the scope of regulations to be adopted later.