Switzerland relaxes AML rules for small fintech firms
The Swiss parliament has taken a chill pill and relaxed the anti-money laundering (AML) rules for “small” fintech firms.
For the purposes of its “draft ordinance”, “small” institutions are those with gross revenues of less than CHF 1.5 million ($1.53 million).
One specific relaxation will see small institutions, unlike banks, being exempt from the requirement to establish an independent AML unit with monitoring duties.
FINMA (the Swiss Financial Market Supervisory Authority) says: “As a rule, all financial institutions are subject to similar due diligence requirements relating to combating money laundering.
“However, as most fintech licence applicants are likely to be smaller institutions, FINMA proposes to introduce some organisational relaxations for such institutions. These principles will now be set out in the Banking Ordinance.”
To give you some background, in mid-June 2018, the Swiss parliament launched a new licensing category, known as the fintech licence, with the aim of promoting financial market innovation.
This new licensing category under the Banking Act will apply to institutions which accept public deposits of up to CHF 100 million ($102 million) but which do not invest or pay interest on them.
These institutions will be subject to the Anti-Money Laundering Act (AMLA) and its due diligence requirements.
The parliament also says it has become necessary to revise the FINMA Anti-Money Laundering Ordinance (AMLO-FINMA).
Consultation on AMLO-FINMA will last until 26 October 2018. The Federal Council aims to implement the partially revised Banking Act with effect from 1 January 2019. If possible, the amendments to AMLO-FINMA will enter into force at the same time.
Incidentally, in an opinion piece published in June, Prof. Dr. Thomas Ankenbrand and Denis Bieri, The Institute of Financial Services Zug IFZ, discussed how Switzerland has progressed into a major global fintech hub.