FINMA announced that 64 banks meet the criteria for participation in the voluntary small banks regime in Switzerland. Under the small banks regime, small, particularly liquid and well-capitalized institutions, are relieved of certain regulatory requirements. In addition, FINMA has streamlined auditing for all institutions: small institutions without observable increased risks can now request two- or three-yearly auditing by their audit firm instead of annual auditing. FINMA has so far granted reduced audit frequency to 56 smaller institutions, 19 of which are also participating in the small banks regime.
Nearly 200 banks and securities firms fall in the supervisory categories 4 and 5 in Switzerland and these can apply to participate in the small banks regime. Some banks are voluntarily foregoing participation while others do not meet the required criteria. FINMA does not publish a list of participants in the small banks regime. FINMA launched the small banks regime in 2018. Seventy banks have applied to register since the conclusion of the 18-month pilot project and the registration deadline at the end of January 2020. Sixty-four of these banks fulfill the criteria to take part and are being admitted to the small banks regime retroactively from the beginning of 2020. FINMA expects the institutions participating in the small banks regime to be able to save costs directly and indirectly, owing to the quantitative and qualitative exemptions and relaxations. They will be able, for example, to forego the calculation of risk-weighted assets and the structural liquidity ratio and have reduced disclosure obligations.
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Keywords: Europe, Switzerland, Banking, Small Banks Regime, Regulatory Capital, Disclosure, FINMA
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