Swiss Authorities Amend Liquidity Ordinance, Issue Other Updates

Below are the key highlights of the recent updates:

• During its meeting in June 2022, the Swiss Federal Council adopted amendments to the Liquidity Ordinance. The current requirements in the Liquidity Ordinance did not result in systemically important banks holding an appropriate and consistently higher level of liquidity. The requirements were therefore comprehensively revised and increased. The new regulatory concept for systemically important banks encompasses both basic and additional requirements. The basic requirements cover certain risks that are not sufficiently taken into account in the provisions applying to all banks. For instance, systemically important banks will now have to hold sufficient liquidity to weather a 90-day liquidity crisis (as opposed to 30 days). FINMA may also impose institution-specific surcharges. For the purposes of meeting the increased requirements, certain measures can be counted up to an upper limit, such as the sale of marketable securities that a bank can use to generate liquidity during a crisis. The affected banks will have a transition period of 18 months to comply with the new requirements.
• FINMA published a factsheet on crypto-assets, highlighting that anyone wishing to operate a business model with crypto-assets must check whether they require authorization or supervision under financial market law. In particular, providers of custody or trading activities with payment tokens may need to be licensed as a bank. The same applies to providers who hold payment tokens from several clients in their own wallets. However, under certain circumstances, a fintech license may be sufficient, which means that lower licensing requirements must be adhered to. If a business model involves the trading of securities, then the provider must also check whether authorization under the Financial Institutions Act or the Financial Market Infrastructure Act is required. This may be the case for the operation of trading and settlement platforms for asset tokens. Further, if FINMA receives specific information that an activity involving crypto-assets is being carried out without the authorization required under financial market law, it will launch an investigation. 
• Finally, FINMA extended the duration of protective measures against Sberbank (Switzerland) AG. In March 2022, FINMA had announced these measures, which included a deferral of obligations from deposits and an extensive ban on payments and transactions. Due to the international sanctions environment and the subsequent risks to the liquidity situation of the bank, the measures will remain in place until August 02, 2022.

Related Links (in English and German)

• Press Release on Liquidity Ordinance
• Liquidity Ordinance (PDF)
• Explanatory Notes to the Ordinance (PDF)
• Factsheet on Crypto-Assets (PDF)
• Press Release on Sberbank (Switzerland) AG

Keywords: Europe, Switzerland, Banking, Liquidity Ordinance, Regtech, Credit Risk, Liquidity Risk, Sberbank, Swiss Federal Council, Crypto-Assets, FINMA