Swiss Financial Watchdog Issues Guidelines For New FinTech License
The Swiss Financial Market Supervisory Authority (FINMA) has introduced a new FinTech license with relaxed requirements.
During its meeting on November 30, the Swiss Federal Council brought into force a corresponding amendment to the Banking Act to promote innovation in the financial sector and remove barriers to market entry for FinTech firms. Beginning January 1, 2019, FinTech companies, including blockchain-related and crypto-related firms, would be able to apply for the new FinTech license.
FINMA is responsible for granting the FinTech license. Upon receiving license applications, FINMA will assess whether the applicants’ business activities require a license and whether the planned business activities are possible under the terms of the FinTech license.
To receive the FinTech license, an applicant must provide description of the proposed activity and organization, including the proposed business activity, geographical scope and target clientele. Applicants are also required to submit business financial plans, assets storage methods, risk management, anti-money laundering (AML) policies, and others. The duration of the procedure depends on the complexity of the project and the quality of the application.
“A further requirement is that an institution with a FinTech licence (persons under Article 1b of the Banking Act) must be a company limited by shares, a corporation with unlimited partners or a limited liability company and must have its registered office and conduct its business activities in Switzerland,” the regulator said.
Once approved, FinTech companies will be able to accept public funds of up to CHF 100 million ($100M USD), provided they neither invest nor pay interest on these funds.
In September of this year, the Swiss Bankers Association (SBA) published guidelines that include promoting conditions that support the sustainable growth of companies involved in blockchain technology. The guidelines has been welcomed by FINMA and the Federal Department of Finance.