Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Swiss propose light-touch rules to lure fintech sector

Published 11/02/2016, 07:27 AM
Updated 11/02/2016, 07:27 AM
© Reuters. Swiss State Secretary for International Financial Matters Gasser attends a news conference on Switzerland's rules for the fintech sector in Bern

© Reuters. Swiss State Secretary for International Financial Matters Gasser attends a news conference on Switzerland's rules for the fintech sector in Bern

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.

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

- 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.

© Reuters. Swiss State Secretary for International Financial Matters Gasser attends a news conference on Switzerland's rules for the fintech sector in Bern

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.