A division of the Swiss government has called for an easing of regulations for fintech firms in favour of a more forward-thinking approach, including a special ‘fintech’ license.
The Swiss Federal Council has recommended a three-pronged strategy to support fintech startups. Firstly, it suggests holding money in settlement accounts to help crowdfunding services. Secondly, it advises launching a regulatory sandbox for fintech startups so that they will not be subject to monitoring from the Swiss Financial Market Supervisory Authority (FINMA) aside from AML oversight.
Thirdly, the Council is pushing for a new fintech license to be granted by FINMA, restricted to deposit-taking businesses and not lending institutions. The license would warrant a less stringent regulatory landscape, such as lower capital requirements.
In addition, the Council would also like to see a reduction in the barriers to entry for fintech startups outside of the traditional financial services regulations, designed to appeal to crypto-currency providers.
According to Swiss Finance Minister Ueli Maurer, these steps will hopefully encourage more innovative fintech startups to set up in Switzerland. “We assume that with ther 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,” he said to Reuters.
The Council would like to see a consultation draft drawn up by the Swiss Federal Department of Finance in early 2017.
The announcement of the fintech initiative comes shortly after a redefining of corporate governance rules for Swiss banks, including the streamlining of the regulatory framework, as Switzerland continues to try and woo fintech firms amid the uncertainty over Brexit and its implications for UK-based startups especially.
It also follows a raft of initiatives launched by FINMA back in March to stimulate futher growth in the country’s emerging fintech sector, which included new rules for onboarding clients using online identification.