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    FINMA Revises Practices in Relation to Supervision of Fintech Firms

    June 28, 2019

    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.


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    Effective Date: July 01, 2019 

    Keywords: Europe, Switzerland, Banking, Securities, Fintech, Fintech License, Regulatory Sandbox, Circular 2008/3, Circular 2013/3, FINMA

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