The Swiss Financial Market Supervisory Authority FINMA has introduced a new licensing category for fintech companies and is revising the regulatory sandbox provisions. These developments require certain technical adjustments in supervisory practice and, in this context, FINMA is publishing the partially revised Circulars 2008/3 "Public Non-bank Deposits" and 2013/3 "Auditing." These circulars enter into force on July 01, 2019.
Circular 2013/3, in the sense of a risk-oriented supervisory concept, regulates the audit of supervised institutions by the audit companies as an extended arm of FINMA. FINMA supplemented its circular on auditing with the requirements of the regulatory review of companies in the new authorization category of fintech license. It provided some simplification of the risk analysis and audit strategy for these institutions when compared to larger or more complex companies. On the basis of the comments received on the consultation that ended on May 15, 2019, FINMA supplemented and clarified the circular and specified an annual compliance check with regard to the lack of deposit privilege.
In addition, the scope of Circular 2008/3 "Public Non-bank Deposits is only for banks that are supervised by FINMA under the Banking Act (with a few exceptions). The circular is related to the commercial acceptance of deposits by non-banks within the meaning of the Banking Act. With effect from April 01, 2019, the Federal Council is making changes to the provisions related 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 banks. In the proposed amendment to the “Public deposits with non-banks” circular, FINMA had set out its interpretation of the term “interest rate differential business.” Doing so can increase the legal certainty for those who wish to make use of the sandbox in the future.
Effective Date: July 01, 2019
Keywords: Europe, Switzerland, Banking, Securities, Fintech, Fintech License, Regulatory Sandbox, Circular 2008/3, Circular 2013/3, FINMA
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
In a response to the questions posed by a member of the European Parliament, the President Christine Lagarde highlighted the commitment of the European Central Bank (ECB) to an ambitious climate-related action plan along with a roadmap, which was published in July 2021.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The French Prudential Control and Resolution Authority (ACPR) published the corrective version of the RUBA taxonomy Version 1.0.1, which will come into force from the decree of January 31, 2022.
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.