Switzerland’s FINMA consults on regulation amendments concerning fintech companies

Maria Nikolova

Under the proposals, companies with FinTech licenses will benefit from less extensive auditing.

Switzerland’s Financial Market Supervisory Authority (FINMA) is proposing regulation amendments that will affect fintech companies.

Let’s recall that, the Swiss parliament has introduced a new licensing category for FinTech companies. Furthermore, the Federal Council has adjusted the provisions concerning the sandbox. These changes require a corresponding adjustment of FINMA’s supervisory practice.

For this reason, FINMA is opening a consultation on Circulars 2008/3 “Public deposits with non-banks” and 2013/3 “Auditing”. The consultation will last until May 15, 2019. The partially revised circulars are expected to enter into force in the fall of 2019.

On January 1, 2019, the Swiss parliament introduced a new licensing category known as the FinTech licence. As a result of this, FINMA is adding the requirements for the regulatory auditing of companies in this new licensing category to its Auditing circular. The requirements for FinTech companies are based on the established auditing of banks and securities dealers, but the audit is less extensive and the reporting process simpler, while focusing on the risks specific to FinTech business models.

With effect from April 1, 2019, the Federal Council is also making changes to the provisions relating to the sandbox. It is possible to invest deposits received up to CHF 1 million within the sandbox.

However, operating in the so-called interest rate differential business is prohibited and remains the privilege of the banks. In its amendment to the “Public deposits with non-banks” circular, FINMA sets out its interpretation of the term “interest rate differential business”. By doing so, it is increasing the legal certainty for people who wish to make use of the sandbox in the future.

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