SWITZERLAND Law and Practice Contributed by: Judith Raijmakers and Florian Thomas Willi, Loyens & Loeff
• refinances itself to a significant extent from several banks that do not have a major stake in it, to finance various individuals or compa - nies that are not part of their own business group. The terms public deposits and commercial capacity require further explanation. Pursuant to Swiss law, public deposits are understood to be liabilities to customers with the central char - acteristic of a repayment obligation. In principle, an entity that continuously accepts more than 20 public deposits or publicly recommends itself as a recipient of public deposits (ie, advertises it, even if fewer than 20 deposits result from it) is deemed to be acting in a commercial capacity. Swiss entities that meet the abovementioned requirements should in principle apply for a banking licence. In some cases, such entities may alternatively apply for a “fintech licence” – also called a “banking licence light” – or may benefit from the sandbox regime. Both concepts are explained below. The fintech licence allows for the acceptance of public deposits for which no full banking licence is required but this comes with certain limitations. Fintech-licenced entities may accept public deposits on a commercial basis as long as (i) the aggregate amount of deposits does not exceed CHF100 million; (ii) the deposits do not bear interest; and (iii) the deposits are not reinvested by the company (eg, deposits are not used for on-lending purposes). Generally, the requirements of such fintech licence are less stringent than those of the “full” banking licence. In particular, in relation to the accounting and auditing standards, the non- application of the provisions on deposit protec - tion, and the lower capital requirements.
The Swiss sandbox regulation intends to facili - tate fintech startups that may struggle to obtain a fintech- or “full”-banking licence. Entities that can benefit from the sandbox are those that are not deemed to act on a commercial basis as a result of: • permanently accepting more than 20 public deposits totalling no more than CHF1 million; • not engaging in interest margin business; and • informing the depositors, before making the deposit, in writing (or other form demonstra - ble by text) that they are not supervised by FINMA and that the deposit is not covered by the deposit protection. If an entity in scope of the sandbox exception exceeds the CHF1 million threshold, it must report this to FINMA within ten days and apply for a “full” banking or a fintech licence within 30 days. Whether this 30-day period is realistic in FINMA assigns banks to supervisory categories based on their total assets, assets under man- agement, deposits subject to the deposit pro - tection scheme and capital. Banks in different categories are supervised with different levels of intensity. Categories 1 and 2 include the largest market participants, which require greater attention in view of their importance and risk profile (high to very high risk). FINMA subjects these players to ongoing, close supervision. Categories 1 and 2 include the systemically important banks (SIBs), which are, as of October 2024, UBS, Raiffeisen Group, Zürcher Kantonalbank and PostFinance. Category 3 banks include large and complex market participants that carry significant risk and practice, is questionable. Supervisory Categories
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