The Federal Council of Switzerland is consulting on the adaptation of federal law to the developments in distributed ledger technology (DLT). It thereby wants to increase legal certainty, remove hurdles for DLT-based applications, and limit risks of misuse. The draft serves to further improve the regulatory framework for DLT in Switzerland, particularly in the financial sector. The consultation will end on June 28, 2019.
The Federal Council, in December 2018, had adopted a report on the legal framework for blockchain and DLT in the financial sector. The Federal Council emphasized that it wants to create the best possible framework conditions so that Switzerland can establish itself and evolve as a leading, innovative, and sustainable location for fintech and DLT companies. Moreover, it wants to consistently combat abuses and ensure the integrity and good reputation of Switzerland as a financial center and business location. Among other things, the report showed that Switzerland's legal framework is already well-suited to dealing with new technologies, including DLT. However, it also pointed out the need for selective action. In the consultation draft, the Federal Council proposes the following adjustments:
- In the Swiss Code of Obligations, the possibility of an electronic registration of rights that can guarantee the functions of negotiable securities is to be created. This is intended to increase legal certainty in the transfer of DLT-based assets.
- In the Federal Law on Debt Collection and Bankruptcy, the segregation of crypto-based assets in the event of bankruptcy is to be expressly regulated, also to increase legal certainty.
- In financial market infrastructure law, a new authorization category for so-called "DLT trading facilities" is to be created. These are intended to be able to offer regulated financial market players and private customers services in the areas of trading, clearing, settlement and custody with DLT-based assets.
- Finally, it should also be possible in future to obtain a license to operate an organized trading facility as a securities firm. This requires an adaptation of the future Financial Institutions Act.
Comment Due Date: June 28, 2019
Keywords: Europe, Switzerland, Banking, Fintech, Distributed Ledger Technology, Blockchain, Swiss Federal Council
Previous ArticleUS Senator Calls on FED to Raise Capital Buffer for Largest Banks
Next ArticleEIOPA Updates Q&A on Regulations in May 2019
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
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.