SWITZERLAND Law and Practice Contributed by: Lukas Morscher and Lukas Staub, Lenz & Staehelin
2.2 Regulatory Regime Swiss law takes a technology-neutral and principle- based approach, which has significant implications for fintech companies operating in Switzerland. Unlike other jurisdictions, Swiss-based fintech companies benefit from a more flexible regulatory environment that allows for greater regulatory latitude. FINMA has made regulatory changes to support fintech develop - ment and lower market entry barriers. These changes are risk-based and technology-neutral. Recent legisla - tive projects, including two specific regulatory licence types – the so-called fintech licence, also referred to as a “banking licence light” – have created a technolo - gy-neutral regulatory framework for accepting depos - its of up to CHF100 million from the public without engaging in typical commercial banking activities (see 2.5 Regulatory Sandbox ), and the DLT trading facil - ity has created a regulatory framework for a trading venue specific to DLT-based securities. Alongside these specific measures, fintech compa - nies are also subject to the general legal and regula - tory framework summarised in the following (see 2.10 Significant Enforcement Actions ). Banking Legislation In Switzerland, soliciting and accepting deposits from the public on a professional basis is a restricted activ - ity that requires a full-fledged banking licence from FINMA. The term “deposit” is broadly defined under the Banking Act as any undertaking for own account to repay a certain amount. Deposits are considered “public” when: • funds are solicited from the public (as opposed to being solicited from banks or professional financial intermediaries, institutional investors, shareholders, employees or other related persons); and • funds from more than 20 depositors are accepted. As a result, many business models used, for instance, by payment systems, payment services providers and crowdfunding or crowdlending platforms are consid - ered to involve the solicitation and acceptance of deposits and may fall within the scope of the Banking Act, therefore triggering licensing requirements.
However, fintech companies do not need a banking licence to hold deposits under CHF1 million (see 2.5 Regulatory Sandbox ). Similarly, no banking licence is needed if deposits (regardless of amount) are held for less than 60 days on a settlement account. All other deposit-taking activities require either a fintech licence for deposit-taking not exceeding CHF100 mil - lion or a full-fledged banking licence. It is also worth noting that funds linked to means of payment, or to a payment system, do not qualify as deposits, provided that: • the funds serve the purpose of purchasing goods or services; • no interest is paid on them; and • the funds remain below a threshold of CHF3,000 per customer. This exemption may benefit some card payment ser - vices and online or mobile payment services. How - ever, they need to ensure that funds stored on user accounts are only for buying goods and services (not for peer-to-peer (P2P) transfers, withdrawals, trans - fers to a user’s bank account, etc) and never exceed CHF3,000 per customer. Anti-Money Laundering Legislation The Federal Anti-Money Laundering Act (AMLA) defines an intermediary as any natural or legal per - son who accepts or holds deposit assets belonging to others, or assists in the investment or transfer of such assets. This covers everyone who carries out credit transactions (such as consumer loans or mortgages, factoring, commercial financing or financial leasing) or who provides payment transaction services. This affects many emerging business models, such as mobile payment, blockchain and related applications, cryptocurrencies, automated investment advice, crowdfunding and P2P lending. Under this broad scope, many – if not most – fintech companies qualify as financial intermediaries and are generally subject to anti-money laundering (AML) obligations, including compliance with know your customer (KYC) rules (see 2.14 Impact of AML and Sanctions Rules ).
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