Update on the Swiss Light Banking License
May 2, 2024Switzerland.
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To boost innovative financial companies, the Swiss parliament has simplified the regulatory requirements for Fintech companies which accepts public deposits. This regulatory simplification, which was implemented on January 1, 2019, allows for a “Swiss Light Banking License”. The regulatory change will greatly reduce the financial requirements for FinTech companies that accept public deposits.
Under previous regulation, the operations of many FinTech companies often fell within the scope of the Swiss Banking Act and therefore required a full Swiss banking license from the Swiss Financial Market Supervisory Authority (FINMA). This Class One Swiss Banking License carries a substantial financial and organizational obligation, and has an onerous licensing process, which has kept many companies out of the Swiss market. For that specific reason, the Swiss Federal Council and Swiss Parliament created a legal framework for FinTech companies.
The new regulations include a “sandbox exemption”, that allows FinTech companies to engage in certain activities which under the previous rules would have triggered the need for a banking license. In general. these companies may accept deposits up to a maximum of CHF 100 million without a full banking license, so long as such assets are not invested or interest bearing.
Three years after this new legislation was put in place it continues to gain popularity with start-ups.