SWITZERLAND Law and Practice Contributed by: Lukas Morscher and Lukas Staub, Lenz & Staehelin
2.4 Variations Between the Regulation of Fintech and Legacy Players Recently, the legislator’s focus has been on adapting the applicable legal and regulatory framework to the needs of the fintech sector. The Swiss legislator has subsequently introduced three measures within Swiss banking legislation aimed at promoting innovation in the financial sector: • any amount of monies can now be held on settlement accounts (eg, for crowdfunding projects) for up to 60 days (as opposed to seven days, as was the case); • a sandbox has been created where com - panies can accept public deposits of up to CHF1 million without having to apply for a banking or fintech licence, subject to certain conditions, such as disclosures and prohibi - tions against investing these deposits; and • there is a new fintech licence suitable for businesses whose activity involves some form of deposit-taking, but without any lend - ing activities involving maturity transformation (see 2.5 Regulatory Sandbox ). 2.5 Regulatory Sandbox In addition to the regulatory sandbox (see 2.4 Variations Between the Regulation of Fintech and Legacy Player s), under the fintech licence, a company is allowed to accept public deposits provided that: • the total amount of deposits does not exceed CHF100 million; • the deposits do not bear interest (or are not otherwise remunerated); and • the deposits are not re-invested by the company (ie, they are not used for on-lending purposes).
asset management services or other regulated services (application of FinIA and new licensing requirements). 2.3 Compensation Models There are no specific rules on the amount of fees that fintech companies may charge their customers. However, Swiss law provides for a number of disclosure obligations in relation to financial service fees, including the following: • retrocessions, kickbacks, rebates and similar payments or financial benefits need to be disclosed (including payments received from other group companies) prior to entering into a contract/transaction; the disclosure has to be specific and, where the exact fees cannot be calculated at the outset of the transaction, the fee disclosure has to include the relevant percentages and calculation methodologies; • unless a client has specifically and expressly waived its rights, retrocessions, kickbacks and similar payments need to be handed over in full to the customer; and • where a key information document (KID) needs to be prepared and handed over to Swiss private clients (ie, with respect to col - lective investment schemes and structured products), a detailed fee disclosure will have to be included in the KID. For the sake of completeness, it should be noted that FinSA also provides for certain rules against abusive conduct by financial service providers (such as third-party distributors of the products) that are relevant in relation to fees. For exam - ple, a financial service provider may not invoice a price that differs from the effective execution price when processing client orders.
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