During its meeting on 1 February 2017, the Federal Council initiated the consultation on amendments to the Banking Act and Banking Ordinance in the fintech area. The revision should ensure that barriers to market entry for fintech firms are reduced and that the competitiveness of the Swiss financial centre is enhanced. The consultation will last until 8 May 2017.
The proposed amendments to the Banking Act (BankA) and Banking Ordinance (BankO) aim to regulate fintech and other firms which provide services outside normal banking business according to their risk potential. A form of deregulation with three supplementary elements is being proposed:
- First, the exception provided for in the Banking Ordinance for the acceptance of funds for settlement purposes (Art. 5 para. 3 lit. c of the BankO) should apply explicitly for settlements within 60 days (instead of only for settlements within seven days as was the practice up to now). For securities dealers, what should remain crucial is that the planned main transaction is organised and directly foreseeable. This change requires an amendment to the BankO.
- Furthermore, an innovation area should be created: the acceptance of public funds up to CHF 1 million should not be classified as operating on a commercial basis and can be exempt from authorisation. This change should allow firms to try out a business model before they are finally required to obtain authorisation in the case of public funds of over CHF 1 million. This change also requires an amendment to the BankO.
- Finally, there should be simplified authorisation and operating requirements relative to the current banking licence in the areas of accounting, auditing and deposit protection for companies that accept public funds of up to a maximum of CHF 100 million but do not operate in the lending business. This requires an amendment to the BankA. Less stringent requirements particularly in the areas of minimum capital, own funds and liquidity would have to be regulated within the scope of implementing regulations to be issued later.
A dynamic fintech system can contribute significantly to the quality of Switzerland’s financial centre and boost its competitiveness. Against this backdrop, the Federal Council called for an easing of the regulatory framework for providers of innovative financial technologies on 2 November 2016. This easing should reduce barriers to market entry for providers in the fintech area and increase legal certainty for the sector overall.
Due to the rapidly progressing digitisation in the financial sector, in particular in the blockchain area, it can be assumed that business models will develop which are not yet conceivable today. The Federal Council will follow these developments closely also in the future and will swiftly propose the necessary regulatory adjustments if required.