Banking, Switzerland updates

FINMA publishes supervisory notification on token sales and ICOs
Meyerlustenberger Lachenal
  • Switzerland
  • October 20 2017

The Swiss Financial Market Supervisory Authority (FINMA) recently published a supervisory notification on token sales and initial coin offerings (ICOs). It also announced that it was examining whether several ICOs or their corresponding business models violate supervisory provisions. A FINMA press release cited the marked increase in ICOs carried out in Switzerland in recent months as a reason for its action.

FINMA implements new fintech rules in circular on public deposits with non-banks
Meyerlustenberger Lachenal
  • Switzerland
  • September 22 2017

The revised Banking Ordinance of April 30 2014 regarding new financial technology (fintech) regulations recently entered into force. The purpose of the proposed revisions is to enhance the competitiveness of Switzerland as a major fintech hub and to create an appropriate regulatory framework for fintech companies providing services outside traditional banking business by taking into account the specific risk-profile of their business models and service offering.

Government adopts first part of revised fintech rules to ease regulatory framework
Meyerlustenberger Lachenal
  • Switzerland
  • July 14 2017

The Federal Council recently adopted an amendment to the Banking Ordinance scheduled to enter into force on August 1 2017. Following the announcement of the revised rules, the Swiss Financial Market Supervisory Authority published a guidance note regarding the new rules on public deposits. The revision will reduce some of the barriers to market entry for financial technology firms.

Federal Council – banking deposit protection scheme and segregation of custody assets
Meyerlustenberger Lachenal
  • Switzerland
  • July 07 2017

The Federal Council recently announced its intention to strengthen the existing deposit protection scheme through a series of different measures. The council also intends to strengthen the regulations on the protection of securities and other assets deposited by clients with a bank or securities dealer by introducing a new obligation to keep those assets segregated from other clients' assets on a sub-custodian level, to the extent that the chain of custody is in Switzerland.

Federal Council proposes revisions to boost fintech innovations
Meyerlustenberger Lachenal
  • Switzerland
  • April 28 2017

The Federal Council recently initiated a consultation procedure on new financial technology (fintech) regulations. The revised provisions ensure that barriers to market entry for fintech firms are reduced and that Switzerland's competitiveness as a financial centre is maintained. The consultation will end on May 8 2017. The proposed amendments to the Banking Act and the Banking Ordinance aim to ease the regulatory framework for innovative fintech companies, while taking into account potential risks.

May bank refuse to execute client's transfer instructions for tax compliance reasons?
Meyerlustenberger Lachenal
  • Switzerland
  • March 03 2017

The Appellate Court of the Canton of Geneva recently rendered three decisions ordering a bank to execute the clients' transfer and payment instructions. The latest decision leaves the door open for banks to argue that the legislation of the state where taxes ought to be paid on assets held for a foreign client's account have changed and that, as a result, they now incur the risk of criminal charges which would prevail over their obligation to execute their clients' payment or transfer instructions.

Supreme Court ruling on banks' liability in relation to external asset managers
Meyerlustenberger Lachenal
  • Switzerland
  • September 30 2016

The Supreme Court recently upheld a bank's liability for damages caused to its client by an external asset manager. While this ruling has confirmed settled case law in considering that a bank is in principle not liable for the wrongdoing of an external asset manager, it also clarifies under which conditions a bank may have a duty of disclosure regarding its clients. It appears that banks must ensure a complete transmission to the client of all information that they possess.

Impact of new financial market infrastructure regulation
Meyerlustenberger Lachenal
  • Switzerland
  • July 22 2016

When the Financial Market Infrastructure Act and the Financial Market Infrastructure Ordinance came into effect, specific transitional periods were granted to fulfil new duties, as well extended record-keeping duties for banks as participants on trading venues regarding securities transactions. As organised facilities that are not subject to authorisation may be operated only by banks, securities dealers, stock exchanges or multilateral trading venues, these changes will affect banks significantly.

FINMA supports regulatory changes in favour of fintech industry
Meyerlustenberger Lachenal
  • Switzerland
  • April 08 2016

According to the Banking Act, several financial technology business models carry out some sort of banking business where a full banking licence would be too expensive and would not reflect the business model properly. As a result, the Financial Market Supervisory Authority supports a new licensing category for financial innovators carrying out some banking activities, but with limited acceptance of client assets and no lending activity.

FINMA issues industry bans
Meyerlustenberger Lachenal
  • Switzerland
  • March 04 2016

According to the Federal Act on the Swiss Financial Market Supervisory Authority (FINMA), if FINMA detects a serious violation of supervisory provisions it may prohibit the individual responsible from acting in a management capacity over any person or entity subject to its supervision. FINMA has announced that it will use enforcement action as a visible means of achieving its supervisory objectives.

Crowdfunding platforms and banking licences
Meyerlustenberger Lachenal
  • Switzerland
  • December 11 2015

The Swiss Financial Market Supervisory Authority recently issued a factsheet on crowdfunding, in which it examined when crowdfunding platform operators and project developers must obtain a licence before commencing activities. It has also proposed to introduce into law a new category of banking licence that will formally place crowdfunding platform operators under its supervision while alleviating constraints.

Privacy protection and banking secrecy
Meyerlustenberger Lachenal
  • Switzerland
  • September 25 2015

A recent amendment to the Federal Act on Banks and Saving Banks has increased criminal liability for the violation of banking secrecy. Previously, although the theft, sale or transfer of bank data was prohibited, third parties benefiting from stolen data were not penalised. Under the amended act, intentional disclosure of data covered by banking secrecy will be subject to a penalty of up to three years' imprisonment or a monetary fine.

Financial Services Act and Financial Institutions Act: results of consultation procedure
Meyerlustenberger Lachenal
  • Switzerland
  • April 24 2015

The federal government has published the results of the consultation on the Financial Services Act and the Financial Institutions Act. It instructed the Federal Department of Finance to carry out various adjustments regarding enforcement and draw up a dispatch by the end of the year. It has also taken initial decisions on the direction to be taken regarding the controversial topics in the consultation procedure.

Seizure in Switzerland of assets held at foreign branch of Swiss bank
Meyerlustenberger Lachenal
  • Switzerland
  • February 06 2015

The Federal Supreme Court recently confirmed the possibility of freezing the assets of a debtor at the registered seat of a Swiss bank where the debtor is a client of the bank's foreign branch. While banks are often not allowed to control the bank accounts of their foreign branches because of regulatory prohibitions, the head office is regularly informed of certain activities taking place abroad, including the seizure of assets.

Federal Financial Services Act and Federal Financial Institutions Act
Meyerlustenberger Lachenal
  • Switzerland
  • December 12 2014

The Federal Financial Services Act aims to enhance customer protection while providing additional means in case of disputes. The Federal Financial Institutions Act aims to regulate the supervision of financial service providers offering asset management services. In principle, the rules for financial institutions that already require a licence will be taken over from applicable legislation, but will be harmonised according to activity.

New self-regulatory measures for Swiss banks on granting mortgages
Meyerlustenberger Lachenal
  • Switzerland
  • August 08 2014

The Swiss Bankers Association recently amended guidelines for the examination, evaluation and treatment of loans guaranteed by pledges on real estate and guidelines on minimum requirements for mortgages. The guidelines apply to both owner-occupied residential properties and investment property apartment buildings.

Banks' liability regarding actions of bank account proxy holders
Meyerlustenberger Lachenal
  • Switzerland
  • May 16 2014

In a recent decision the Federal Supreme Court specified that a bank is not required to monitor transactions carried out by a client on its bank account, according to the Federal Anti-money Laundering Act. A bank must ensure that the agent's actions are covered by a valid proxy. It is the client's responsibility to control the agent's actions. The bank must intervene only if it is certain that the agent is clearly acting to the detriment of the principal.

Swiss Bankers Association adopts revised Portfolio Management Guidelines
Meyerlustenberger Lachenal
  • Switzerland
  • March 07 2014

The Swiss Bankers Association recently adopted revised Portfolio Management Guidelines. The new guidelines are self-regulatory trade regulations applicable to banks. The guidelines include specific mention of repurchase and reverse repurchase transactions, as well as securities lending and borrowing transactions. Provisions regarding the remuneration of the bank have also been amended.

FINMA's position paper on the salvaging of large banks
Meyerlustenberger Lachenal
  • Switzerland
  • October 25 2013

The Swiss Financial Market Supervisory Authority (FINMA) recently published a position paper regarding the resolution of global systemically important banks. The paper explains FINMA's emergency strategy for the global systemically important banks in Switzerland and outlines ways in which salvage or break-up can be implemented operationally in cooperation with foreign supervisory and resolution authorities.

Protection of deposits with banks and savings banks
Meyerlustenberger Lachenal
  • Switzerland
  • September 20 2013

Swiss law has implemented a privately operated deposit protection system based on preferential treatment, accelerated pay-outs and a guarantee by the deposit protection scheme. The law does not provide a state guarantee for the deposit protection system. However, participating members must hold sufficient liquid assets to cover half of their maximum contribution obligations and the minimum level of liquidity prescribed by law.

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