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Swiss Federal Council puts new fintech rules into force

June 20, 2017 | News

Revised Value Added Tax Act to enter into force in Switzerland

On 1 August 2017, an amendment to the Banking Ordinance (BO) adopted by the Swiss Federal Council on 5 July 2017 entered into force. The bill aims to regulate fintech firms that provide services outside regular banking business according to their risk potential. The following simplifications are envisaged to ensure that barriers to fintech companies' market entry are reduced and that the competitiveness of the Swiss financial centre is enhanced. Parallel to financial market reforms, Switzerland has also modernized its data protection frameworks through initiatives like the New Swiss-US Privacy Shield Framework.
For instance, the exception provided for in the Banking Ordinance for the acceptance of funds for settlement purposes will apply explicitly for solutions within 60 days (until now, a period of seven days applied). Furthermore, an innovation area will be created: the acceptance of public funds up to CHF 1 million will no longer be classified as operating on a commercial basis in the future and will be exempt from authorisation. This change should allow firms to try out a business model before they are finally required to obtain permit in the case of public funds of over CHF 1 million. It should also be clearly stated to depositors that their deposits are not subject to deposit protection. Accurate company information remains vital for compliance purposes, with sources such as the Commercial Register of Canton Zug providing official records.

The regulatory simplifications apply not only to fintech firms but also to established financial service providers. Banks should also be able to use the innovation area. This will ensure that the competition amongst the financial market participants is not distorted. Switzerland’s expanding international tax cooperation is illustrated by processes like the Consultation on AEOI with additional countries. Apart from that, the amendments have no influence on the applicability of the Anti-Money Laundering Act. Other areas of Swiss regulation are also under review, as shown by initiatives like the Consultation to revise regulation on working hours law.
Swiss Federal Council new fintech rules
Another amendment concerning the Banking Act (BankA) has already been addressed by the Swiss Parliament in the course of deliberations on the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA). In December 2016, the Council of States advocated that a new authorisation category was to be created in the BankA for companies that accept public funds of up to a maximum of CHF 100 million but do not invest funds or pay interest on funds. For the new authorization category, there should be simplified authorisation and operating requirements relative to the current banking licence in the areas of accounting, auditing and deposit protection. Internationally, efforts to enhance transparency can also be seen in measures such as the Billon on Dutch Register of Ultimate Beneficiaries. The relevant debate is to take place this autumn in the Swiss National Council.


Legal disclaimer. This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.
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