FINMA Consults on Revisions to the Anti-Money Laundering Ordinance
The Swiss Financial Market Supervisory Authority FINMA is consulting on the revisions to the FINMA Anti-Money Laundering Ordinance (AMLO-FINMA). The revisions are the result of the creation of a new licensing category for fintech firms. The consultation ends on October 26, 2018. The Federal Council aims to implement the partially revised Banking Act with effect from January 01, 2019. If possible, the amendments to AMLO-FINMA will enter into force at the same time.
The Swiss parliament, on June 15, 2018, had launched a new licensing category for fintech license, with the aim of promoting financial market innovation. This new licensing category under the Banking Act will apply to institutions that accept public deposits of up to CHF 100 million but that do not invest or pay interest on them. These institutions will be subject to the Anti-Money Laundering Act (AMLA) and its due diligence requirements. Consequently, it has become necessary to revise the FINMA Anti-Money Laundering Ordinance (AMLO-FINMA). The corresponding due diligence requirements under AMLA must now be defined in detail for institutions that will fall within this new category. This will necessitate changes to some of the provisions of AMLO-FINMA.
As a rule, all financial institutions are subject to similar due diligence requirements related to combating money laundering. However, as most fintech license applicants are likely to be smaller institutions, FINMA proposes to introduce some organizational relaxations for such institutions. These principles will now be set out in the Banking Ordinance. One specific relaxation in line with the principle of proportionality will see small institutions, unlike banks, being exempt from the requirement to establish an independent anti-money laundering unit with monitoring duties (Article 25 of AMLO-FINMA). For the purpose of the draft ordinance, "small" institutions are those with gross revenues of less than CHF 1.5 million.
Related Link: Press Release and Consultation
Comment Due Date: October 26, 2018
Keywords: Europe, Switzerland, Banking, Fintech, Proportionality, AML Ordinance, Fintech License, FINMA
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