Switzerland’s Federal Council adopts provisions for fintech authorization
The Federal Council brought into force a corresponding amendment to the Banking Act to promote innovation.
Switzerland has just made progress towards embracing innovative technologies, as the Federal Council has adopted the implementation of provisions for fintech authorisation.
From January 1, 2019, companies that operate beyond the core activities characteristic of banks will be able to accept public funds of up to a maximum of CHF 100 million on a professional basis subject to simplified requirements. During today’s meeting, the Federal Council brought into force a corresponding amendment to the Banking Act to promote innovation (fintech). In addition, under the decisions made today, crowdlending would be made possible for private consumption within the authorisation-exempt area of the sandbox.
In February 2017, the Federal Council outlined three measures to promote innovation in the financial sector and to remove barriers to market entry for fintech firms. These proposals were put out for consultation. Two of these – the extension of the holding period for settlement accounts and an authorisation-exempt innovation area (sandbox) – have already been regulated at ordinance level in the meantime and came into force on August 1, 2017. The third measure – a new authorisation category with simplified requirements in the Banking Act – is set to come into force on January 1, 2019.
With the new measure, companies with special authorisation can accept public funds of up to CHF 100 million from the start of next year, provided they neither invest nor pay interest on these funds. The simplified requirements will be fleshed out by amendments to the Banking Ordinance, the Auditor Oversight Ordinance and the FINMA Fees and Charges Ordinance.
Under the Banking Ordinance, the sandbox will additionally be extended to include crowdlending business models, whereby public funds up to a total amount of CHF 1 million can one day be brokered not only for commercial and industrial purposes but also for private consumption. This extension has become possible because crowdlending will be subject to the Consumer Credit Act in the future.
Given that certain amount of time will be necessary to implement these rules, the changes to consumer credit law and the associated amendment of the Bank Ordinance will not come into force until April 1, 2019.
