Featured Product

    FINMA Revises Circulars to Implement Small Bank Regime in Switzerland

    November 27, 2019

    FINMA revised several circulars with the aim to implement the small bank regime in Switzerland. FINMA implementing this regime as of January 01, 2020, following a pilot phase and a consultation. The pilot project with 68 participating institutions will end on December 31, 2019. For the definitive launch of the small banksregime, the Federal Council also revised the Capital Adequacy Ordinance. In this context, FINMA has amended eight circulars: outsourcing for banks and insurers (Circular 18/3), operational risk for banks (Circular 08/21), corporate governance of banks (Circular 17/1), disclosures by banks (Circular 16/1), risk distributions for banks (Circular 19/1), credit risk for banks (Circular 17/7), capital buffer and capital planning of banks (Circular 11/2), and liquidity risks for banks (Circular 15/2).

    FINMA will inform banks and securities dealers from Supervisory Categories 4 and 5 over the next few days about the further procedure and the registration process for the small bank regime. The small banksregime seeks to increase efficiency in regulation and supervision of small, particularly liquid and well-capitalized institutions. The consultation participants and the institutions involved in the pilot project welcome the FINMA initiative to introduce a small bank regime and largely support the adjustments to the circulars. FINMA has incorporated various suggestions from the consultation in the final circulars, to define certain relaxations more precisely.

    Banks wishing to participate in the small banksregime must, therefore, be extremely well-capitalized and enjoy high liquidity. In return, they are to benefit from a significantly less complex regulatory regime under the Capital Adequacy Ordinance, which allows them, for example, to forego the calculation of risk-weighted assets. There will also be reduction in the qualitative burden in accordance with the adjusted FINMA circulars. Owing to the exemptions and relaxations, the institutions participating in the small bank regime can expect to be able to save costs directly and indirectly in the future.

     

    Related Link (in German): Press Release and Revised Circulars

    Effective Date: January 01, 2020

    Keywords: Europe, Switzerland, Banking, Small Banks, Proportionality, Capital Adequacy, Disclosures, Credit Risk, Liquidity Risk, Operational Risk, Outsourcing, FINMA

    Featured Experts
    Related Articles
    News

    EIOPA Report Analyzes Use and Impact of Long-Term Guarantee Measures

    EIOPA submitted—to the European Parliament, the Council of the European Union, and EC—its 2020, fifth, and last annual report on long-term guarantee measures and measures on equity risk.

    December 03, 2020 WebPage Regulatory News
    News

    BIS, SNB, and SIX Announce Successful Completion of CBDC POC

    The BIS Innovation Hub Swiss Centre, SNB, and the financial infrastructure operator SIX announced the successful completion of a joint proof-of-concept (PoC) experiment as part of the Project Helvetia.

    December 03, 2020 WebPage Regulatory News
    News

    EBA Sets Out Treatment of Certain Banking Book Positions Under FRTB

    EBA published the final draft regulatory technical standards for calculation of own funds requirements for market risk, under the standardized and internal model approaches of the Fundamental Review of the Trading Book (FRTB) framework.

    December 03, 2020 WebPage Regulatory News
    News

    EIOPA Consults on Integrating Climate Change into SII Standard Formula

    EIOPA published discussion paper on a methodology for the potential inclusion of climate change in the Solvency II (sometimes also written as SII) standard formula when calculating natural catastrophe underwriting risk.

    December 02, 2020 WebPage Regulatory News
    News

    EU Issues Corrigenda to Investment Firms Directive and Regulation

    EU published, in the Official Journal of the European Union, corrigenda to the Directive and the Regulation on the prudential requirements and supervision of investment firms.

    December 02, 2020 WebPage Regulatory News
    News

    MAS Proposes Changes to Rules Arising from Banking Amendment Act

    MAS proposed amendments to certain regulations, notices, and guidelines arising from the Banking (Amendment) Act 2020.

    December 02, 2020 WebPage Regulatory News
    News

    PRA to Elaborate on Approach to Transposition of CRD5 by Mid-December

    PRA published a statement that explains when to expect further information on the PRA approach to transposing the Capital Requirements Directive (CRD5), including its approach to revisions to the definition of capital for Pillar 2A.

    November 30, 2020 WebPage Regulatory News
    News

    RBNZ Consults on Aspects of Insurance Act, Solvency Standards & IFRS17

    RBNZ launched consultations on the scope of the Insurance Prudential Supervision Act (IPSA) 2010 and on the associated Insurance Solvency Standards.

    November 30, 2020 WebPage Regulatory News
    News

    SRB Sets Out Work Program for 2021-2023

    SRB published the work program for 2021-2023, setting out a roadmap to further operationalize the Single Resolution Fund and to achieve robust resolvability of banks under its remit over the next three years.

    November 30, 2020 WebPage Regulatory News
    News

    EIOPA Consults on KPIs on Sustainability for Non-Financial Reporting

    EIOPA is consulting on the relevant ratios to be mandatorily disclosed by insurers and reinsurers falling within the scope of the Non-Financial Reporting Directive as well as on the methodologies to build these ratios.

    November 30, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 6191