Being a Full-Bank, a Light-Bank, or a Non-Bank in Switzerland

swiss full-bank light-bank non-bank exemptions

02 Apr 2019 Being a Full-Bank, a Light-Bank, or a Non-Bank in Switzerland

Conditions and Exemptions

 

ENTITIES REGULATED BY FINMA AS A FULL OR LIGHT BANK (TAKING DEPOSITS)
CONDITIONS SOURCE COMMENTS
Full Banking License Anyone who is primarily active in the financial sector and professionally accepts public deposits in excess of CHF 100 million or carries out public offering to obtain them. Section 1a lit. a BA
Anyone who is primarily active in the financial sector and professionally accepts public deposits of up to CHF 100 million or carries out public offering to obtain them, and invests or pay interests on the such deposits Section 1a lit. b BA
Light Banking License (a.k.a Fintech License) Anyone who is primarily active in the financial sector and professionally accepts public deposits of up to CHF 100 million or carries out public offering to obtain them, and neither invest nor pay interests on the deposits.

Possible business models:

  • providing payment or trading services involving the acceptance of deposits from clients for a period exceeding 60 days;
  • providing wallets for crypto token, if the wallet provider has a repayment obligation towards the clients and receives the power to dispose of the stored crypto token without involvement of the clients;
  • providing brokerage services in relation to forex or cryptocurrencies to the extent the broker holds the clients’ assets for a period longer than 60 days.
Section 1b  BA Anyone who exceeds the threshold of 100 million francs must announce it within ten days to FINMA and submit an application for a full banking license within 90 days.

 

Lighter organisation: FINMA may waive certain requirements regarding compliance and risk management for “light banks” with a yearly gross return of less than CHF 1.5 million and a business model with low risks.
 Definition Active in Financial Field Deposits  Public Professional Basis    
  Anyone who:

  • provides on its own account or as an intermediary financial services, in particular carries out on own account or for third parties credit or deposit transactions, securities dealing, investment or asset management;
  • own qualifying equity interests in companies mainly active in the financial sector (holding companies);
  • is a significant group company;
  • is a foreign institution licensed to receive deposits.
Negative definitions:

All liabilities unless there is an exemption in the law or decided by FINMA.

(Note: Forex margin accounts are deposits; payment token are deposits, especially if the company has access to the private key).

Negative definitions:

Anyone, unless he/she is not considered as “public” by law or by FINMA.

Anyone who, on an on-going basis, accepts more than 20 deposits from the public or uses the public to obtain deposits, even if in doing so a fewer number results, unless there is an exemption in the law or decided by FINMA. Sections 4, 5, 6 BO
 EXEMPTIONS GRANTED BY FINMA FOR ENTITIES TAKING DEPOSITS
DEFINITION CONDITIONS SOURCE COMMENTS
 NO DEPOSIT EXEMPTIONS
“No Deposit Exemption” Are not considered as deposits:

  • Funds received in consideration of a transfer of ownership/title or services contract, or granted as security;
  • Standardised loans/bonds issuance where the issuer publishes a prospectus that meets the disclosure requirements of the Swiss Code of Obligations (CO) for bond offerings;
  • Securities and precious metal traders, asset managers and similar businesses holding deposits in settlement accounts, where such deposits are (i) not interest bearing and (ii) except where the account is held with a licensed securities trader, used for the settlement of transactions within 60 days (with certain exceptions for securities and precious metals dealers). This exception is also available for the on-transfer of funds (such as money transmitting or crowdfunding). However, the exemption is not available to FX traders holding client accounts as well as cryptocurrency traders with a similar activity;
  • Funds linked to a life insurance contract, occupational benefit plans or similar;
  • Small amount (not more than CHF 3’000 at a time) allocated to a payment instrument or payment system, intended for the acquisition of goods or services (should not produce interest);
  • Funds guaranteed by a bank (guarantee of the risk of default).
Section 5 para 3 BO

 

F- Circ. 2008/3 para 10ff.

 
 NO PUBLIC EXEMPTIONS
“No Public Exemption” Deposits exclusively of the following persons:

  • Domestic and foreign banks or other enterprises under regulatory surveillance;
  • Shareholders or partners (and their connected/affiliated persons) holding qualifying equity interests in the relevant debtor;
  • Institutional investors and public corporations with professional treasury management;
  • Employees (incl. retired) who hold deposits with their employers;
  • Associations, foundations or co-operatives, provided they (i) are not involved in the financial sector,  (ii) were created for the sustenance of an idealistic cause, and which strictly use the deposits for this cause; and (iii) for which the terms of the deposits last at least six months.
Section 5 para 2 BO

F- Circ. 2008/3 para 31ff.

 

 

 
NOT ACTING ON PROFESSIONAL BASIS EXEMPTION
“Less than 20 Depositors Exemption” Anyone who targets (successfully or not) less than 20 depositors. Section 6 para 1 BO a contrario.

 

F- Circ. 2008/3 para 9

A banking license must be granted before he/she targets more than 20 depositors.
“Sandbox Exemption” Anyone who accepts more than 20 deposits from the public, but:

  • for a maximum amount of CHF 1 million; and
  • he/she does neither invest nor pay interest on such deposits (except in case of industrial or artisanal activity); and
  • the depositors are informed, in writing or by any other evidence, beforehand (i) that it is not supervised by FINMA, and (ii) that the deposits are not covered by the deposit guarantee.
Section 6 para 2 and 3 BO

F- Circ. 2008/3 para 8

In case the threshold is exceeded, FINMA must be informed within 10 days and a banking license must be filed within 30 days.

(Note: this exemption will be modified in Autumn 2019).

 



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