As of 1/1/2019, it will be possible to apply for the so-called Fintech license. The Swiss Financial Market Supervisory Authority FINMA is responsible for granting this license and published its guidelines in this regard on 3/12/2018 to facilitate the application process.
Background – Fintech License
In addition to the conventional banking license, the partially revised Banking Act creates a new license category with simplified requirements, the so-called Fintech license (persons pursuant to Art. 1b BA; SR 952.0). Also as of 1 January 2019, the simplified requirements will be specified by amendments to the Banking Ordinance (BankO), the Auditor Oversight Ordinance and the FINMA Fees and Charges Ordinance. The Fintech license permits companies to accept public funds up to a maximum amount of CHF 100 million, provided they neither invest nor pay interest on these funds. The Fintech license is subject to certain conditions relating to, inter alia, the institution’s organization, risk management, compliance, accounting and minimum capital (at least CHF 300,000 or 3% of deposits). Such conditions are e.g. that an institution with a Fintech license must have its registered office and conduct its business activities in Switzerland.
Purpose and Content of the Guidelines
Contrary to the sandbox exemption, under which institutions may receive public funds of up to CHF 1 million without obtaining a license under certain conditions, a company may only operate beyond this threshold after FINMA has granted its (Fintech) license. The guidelines aim at facilitating the preparation of Fintech license applications and contain a non-exhaustive catalogue of information and documents, which are generally required for this purpose. According to the guidelines, the application must cover the following topics, amongst others:
- General information, such as the reasons and intentions for obtaining a license
- Participations in the applicant, e.g. share capital and persons holding a qualified participation
- Information about persons entrusted with the administration and management of the business
- Business activity and adequate internal organization
- Meeting of financial requirements
- Regulatory audit firm
To obtain a Fintech license, a company has to comply, inter alia, with simplified requirements regarding consolidated supervision compared to a conventional banking license. In addition, it is not necessary to mandate an audit firm in the licensing process (licensing auditor).
The new regulations aim to regulate Fintech companies (in particular) which provide services outside the typical banking business appropriately according to their risk potential. Time will tell how many companies will make use of these lower market entry barriers and apply for a Fintech licence.