The Federal Council of Swiss government announced its plans for easing of the regulatory framework for providers of innovative fintechs that will reduce barriers to market entry for providers in the fintech area and increase legal certainty for the sector overall.
In a move to curb barriers for fintech companies to enter the market, the Federal Council is striving for a future-oriented solution that is comprehensive and is also recommending an approach with three supplementary elements.
According to the release, the first element facilitates fundraising for a crowdfunding project by setting a deadline of 60 days for the holding of money in settlement accounts that is relevant for providers of crowdfunding services. The amendment would be generally applicable and not restricted only to fintech firms.
In the second element, which is a sandbox, a provider can accept public funds up to a total value of CHF 1 million. Such activities are not monitored by FINMA nor authorized. The current money laundering provisions are applicable in the case of a sandbox.
The third element is a new fintech license granted by FINMA. There should be less stringent regulatory requirements for institutions that are restricted to the deposit-taking business and do not operate in the lending business with maturity transformation. The public funds accepted by providers with a fintech license may not exceed the overall value of CHF 100 million.
“The creation of a fintech license is also pioneering by international standards. The new regulation sets out in concrete terms one of the strategic thrusts of the financial market policy recently adopted by the Federal Council. The Federal Council has instructed the FDF to draw up a consultation draft with the required legislative amendments by the start of 2017,” the release stated.
