These adjustments have triggered certain changes to FINMA’s supervisory practice. Therefore, FINMA is conducting a consultation on Circulars 2008/3 “Public deposits with non-banks” and 2013/3 “Auditing”.
What do the adjustments to the FINMA circulars mean in a nutshell?
I. “FinTech license” Circular 2013/3 “Auditing” – partial revision
- Risk analysis
Auditing for FinTech companies is based on the auditing of banks and securities dealers. However, the relaxations for institutions with a FinTech license will be taken into account.
- Auditing strategy
Deviating from the provisions on the audit strategy for banks and securities dealers, FinTech companies must confirm annually that the public deposits are available, as the improper use of public deposits constitutes a major risk.
The reporting is based on the general as well as the particular provisions for banks and securities dealers.
The audit reports relating to the previous intervention must be submitted to FINMA within 6 months after the end of the financial year.
The risk analysis must be submitted 6 months after the end of the previous financial year.
The audit strategy must be submitted 6 months after the end of the previous financial year and is implicitly deemed to have been approved 2 months after submission.
II. Circular 2008/3 Public deposits with non-banks” – partial revision
- The revised Art. 6 para. 2 and 3 of the Banking Ordinance will enter into force on 1 April 2019. The new criterion of the interest rate differential business (Art. 6 para. 2 let. b Draft BO), the upper limit of CHF 1 million (Art. 6 para. 2 let. a Draft BO) and the information requirements (Art. 6 para. 2 let. c Draft BO) will thus be used to define the commercialism referred to in Art. 6 para. 2 BA (sandbox). Investing and paying interest on deposits received is no longer prohibited within the sandbox, but merely operating the so-called interest rate differential business, which remains the privilege of the banks.
- Through the partial revision of FINMA Circular 2008/3 “Public deposits with non-banks”, FINMA is providing more specific information on its interpretation of the term “interest rate differential business”, which is not defined by law, for the purposes of Art. 6 para. 2 let. b Draft BO. In doing so, it is focusing on an economic approach.
- The margin numbers of the Circular which are no longer relevant following the revision of the BO will be repealed.
- The partially revised FINMA Circ. 08/3 is expected to enter into force in autumn 2019.
Find more details here.
How can EY help you?
Our EY specialists can help you in assessing the functional design of your FinTech business model to achieve legal certainty, support in the interaction with the regulators and, if necessary, to obtain a FINMA license to carry out your business.
Contact us for all your legal, regulatory, compliance and tax issues and let us be your trusted legal business advisors, so that you can focus on your FinTech business model.