Swiss propose light-touch
rules to lure fintech sector
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[November 02, 2016]
ZURICH
(Reuters) - Switzerland's cabinet proposed new light-touch regulations
for financial technology (fintech) companies on Wednesday aimed at
bolstering business and competitiveness.
Easing rules could help reduce barriers to market entry and provide more
legal certainty for the burgeoning sector, said the finance ministry,
which must now turn the changes into draft legislation.
Ministry officials said draft legislation could be sent to parliament by
mid-2017 after a public consultation.
"We assume that with the steps we have prepared and the commitment we
have to the overall financial services industry we can provide a
solution that puts us among the top (countries) in the world that
regulate this," Finance Minister Ueli Maurer told a news conference in
Bern.
He said the measures sent a signal that Switzerland will quickly create
good conditions for fintech companies, thus fostering innovation and
preserving financial sector jobs.
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Switzerland lags the likes of Britain and Singapore when it comes to
fintech. Firms specializing in crypto currencies, for instance, say
financial regulations must change for them to thrive in places like Zug,
dubbed "Crypto Valley".
Many crypto currency companies are subject to banking regulations as
they are classed as deposit-taking firms, meaning they need 10 million
Swiss francs ($10.3 million) in paid-up capital once their business
grows above a certain level.
To address these concerns, the cabinet proposed a three-pronged
strategy:
- Setting a deadline of 60 days for holding money in settlement
accounts, facilitating crowd funding services
- Creating a "sandbox" innovation area in which a provider can accept
from the public funds of up to 1 million francs without being monitored
by industry watchdog FINMA
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Swiss State Secretary for International Financial Matters (SIF)
Joerg Gasser attends a news conference on Switzerland's rules for
the fintech sector in Bern, Switzerland November 2, 2016.
REUTERS/Ruben Sprich
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- Establishing a new fintech license, granted by FINMA, for institutions
which are restricted to taking deposits of up to 100 million francs and
do not operate in the lending business. These would be exempt from
traditional depositor protection systems. The minimum capital should
amount to 5 percent of the accepted public funds, but no less than
300,000 francs.
Officials said matters still to be decided include establishing the
legal status of virtual assets and regulating the use of blockchain
technology -- in which a network of computers verifies and updates a
record of transactions through a system derived from virtual currency
bitcoin.
(Reporting by Michael Shields; editing by Jason Neely)
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