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    FINMA Consults on Changes to Practices Related to Fintech Supervision

    March 15, 2019

    The Swiss Financial Market Supervisory Authority FINMA announced 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 the supervisory practices of FINMA. To this end, FINMA is conducting a consultation exercise through Circulars 2008/3 titled “Public deposits with non-banks” and 2013/3 titled “Auditing.” The consultation ends on May 15, 2019. The partially revised circulars are expected to enter into force in Autumn 2019.

    On January 01, 2019, the Swiss parliament introduced a new licensing category known as the "FinTech license." Consequently, 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 the fintech business models. In addition,  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 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 those who wish to make use of the sandbox in the future.


    Related Link: Press Release and Related Documents

    Comment Due Date: May 15, 2019

    Keywords: Europe, Switzerland, Banking, Securities, Fintech, Fintech License, Regulatory Sandbox, Reporting, FINMA

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