Switzerland to amend banking rules to become fintech-friendly
Switzerland’s Federal Council has issued a consultation paper on amendments required to its Banking Act and Banking Ordinance, to create an environment that helps fintech start-ups thrive in the country.
The amendments aim to regulate fintech and other firms which provide services outside of the traditional banking business, in a way that effectively manages risk to the clients, market and economy. The council hopes these amendments will remove the barriers to market entry for fintech firms and increase the competitiveness of the Swiss financial centre.
The changes that are being proposed include:
- The creation of an “innovation area” which exempts firms from obtaining an authorisation. Firms will be classified as “operating on a commercial basis” if they accept public funds of up to CHF 1 million ($1 million). This will help firms try out new business models before they are required to acquire authorisations and permits.
- The simplification of authorisation and operating requirements in the areas of accounting, auditing and deposit protection, for companies accepting public funds up to CHF 100 million, provided they do not run a lending business.
- Relaxation of requirements for minimum capital, own funds and liquidity will also be considered.
Comments on the consultation paper are welcome until 8th May 2017.
By Soumik Roy, editorial contributor to Banking Technology