Swiss plan lighter regulations to seduce fintech firms
If you reduce it, they will come. Swiss ministry officials want to entice fintech firms and boost competition with new, lighter regulations.
The nation’s finance ministry says the plan is to remove barriers to market entry and offer more legal certainty for the fintech space. Ministry officials say draft legislation could be sent to Switzerland’s parliament by mid-2017 after a public consultation.
Finance Minister Ueli Maurer says with its plan and “commitment” to the finserv industry, it “can provide a solution that puts us among the top [countries] in the world that regulate this”.
He says its measures send a signal that Switzerland will offer good conditions for fintech companies.
Recently, the Monetary Authority of Singapore (MAS) and the Swiss Financial Market Supervisory Authority (FINMA) signed an agreement to foster more fintech co-operation. So the nation is aware of the growing fintech scene.
But when it comes to cryptocurrency firms, they are subject to banking regulations because they are classed as deposit-taking companies. This means they need CHF $10 million ($10.3 million) in paid-up capital once their business gets above a certain level.
The Swiss cabinet is aware of such concerns and proposes a new strategy. This includes a deadline for holding money in settlement accounts; creating a “sandbox” innovation area free from FINMA’s monitoring; and establishing a new fintech licence, granted by FINMA, for institutions which are restricted to taking deposits of up to CHF 100 million ($103 million) and do not operate in the lending business.
It is early days for this Swiss seduction technique, but officials say they are also looking at regulating blockchain and the legal status of virtual assets.