SWITZERLAND Law and Practice Contributed by: Judith Raijmakers and Florian Thomas Willi, Loyens & Loeff
Ancillary Banking Activities and Regulatory Approvals Swiss financial regulatory law sets out a hierar - chy of licences granted by FINMA. In hierarchical terms, the banking licence is the “highest”. The “broad” banking licence allows entities to carry out other regulated activities such as (i) securities trading (client dealers and own-account dealers) and market making (securities firm licence); (ii) fund management (manager of collective invest - ment schemes licence); (iii) portfolio manage - ment (asset manager licence); and (iv) trustees activities (trustee licence). Banks are also open to carry out investment advisory activities (such activities are not subject to a licence in Switzer - land). Both the prospective purchaser and seller of qualified participations in a bank must notify FINMA of their intention to purchase or sell. A qualified participation exists when an individual or entity directly or indirectly holds at least 10% of the capital or voting rights of a bank or has the ability to significantly influence its business operations via other means. Banks must also report parties purchasing or selling qualified participations to FINMA as soon as they become aware thereof. Banks are further required to update their list of qualified partici - pants at least once every year (within 60 days after the financial year ends). This can be done via the EHP. 3. Changes in Control 3.1 Requirements for Acquiring or Increasing Control Over a Bank Reporting Obligations for Qualified Participations in Banks
Shareholders of banks (individuals and legal entities) must also notify FINMA before their shareholding hits, surpasses, or drops below the thresholds of 10, 20, 33, or 50 percent of the capital or voting rights. Fit and Proper Requirements The BankA does not set restrictions with respect to the type of entities or individuals holding a controlling interest in a bank. However, as a general principle, any party with a qualified par - ticipation in a bank must ensure proper busi - ness conduct to maintain public confidence in the financial sector and in the supervised institutions. Individuals and entities who hold a qualified participation in a bank must ensure that their influence does not compromise the bank’s prudent and sound business operations. Refer - ence is also made to the ongoing fit and proper requirements related to senior management in 4.2 Registration and Oversight of Senior Man- agement . Foreign Control Swiss-controlled banks that change to foreign control must obtain an additional licence from FINMA. Entities that are under foreign control and apply for a banking licence are also subject to such additional requirements. Foreign control means that foreign holders of qualified participa - tions directly or indirectly hold more than 50% of the votes of, or otherwise exert a controlling influence on, the bank. FINMA will grant an additional licence if certain requirements are met (cumulatively). • The jurisdictions in which the qualified par - ticipants reside or are domiciled must ensure reciprocal rights (Swiss individuals or entities must have the possibility to operate a bank in the relevant jurisdiction and such banks
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