New due diligence obligations for financial institutions with a FinTech license. How EY can support you with the implementation of the new due diligence obligations.

The Swiss Financial Market Supervisory Authority (FINMA) has now published the revised FINMA Anti-Money Laundering Ordinance, which sets out the due diligence requirements for FinTech companies in the new licencing category. The changes become effective already as of 1 January 2019. Authors: Darko Stefanoski, Orkan Sahin, Nicole Zürrer

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New license category creates needs for regulation

With the newly created licensing category called “FinTech licence” financial institutions under Article 1b of the Banking Act can accept public deposits of up to 100 million, provided that they do not invest or pay interest on them. Like all other financial institutions they have to comply with the Anti-Money Laundering Act. Due to this new licensing category, FINMA has published corresponding due diligence requirements in the FINMA Anti-Money Laundering Ordinance. Financial institutions in the new licensing category are subject to more relaxed anti-money laundering due diligence requirements. The revision of the FINMA Ordinance will be effective as per 1 January 2019 and consequently binding for all financial institutions under Swiss Law.

Level playing field: Criteria for granting relaxed requirements

As a rule in combating money laundery, all financial institutions are subject to similar due diligence requirements. However, since most FinTech license applicants are likely to be smaller institutions, FINMA introduces organizational relaxations for institutions with low risk and low gross revenues. But not only the new FinTech companies profit from the due diligence relaxations; the new due diligence requirements apply to all financial institutions under Article 1b of the Banking Act.

Relaxed requirements apply to financial institutions with a gross revenue of less than 1.5 million. In each case has to be taken furthermore into consideration individual key performance indicators, e.g. the number or amount of transactions in transaction related business models.

Applicable due diligence obligations

As the financial intermediaries under Article 1b of the Baking Act are similar to the directly-subordinated financial intermediaries (DSFIs), in general the same due diligence requirements shall apply to both of them. Taking into consideration that the financial institutions under Article 1b of the Baking Act unlike the DSFIs can accept public deposits and therefore practice a high-risk business activity, not all relaxed requirements will apply to them.

Future impact of this new guidelines for financial intermediaries

With the broad reference to the DSFIs applicable anti-money laundering due diligence obligations to intermediaries according to Article 1b of the Baking Act, the already existing rules will be pragmatically adjusted to future licensees.

As a consequence of the newly created licensing category “FinTech license” financial institutions falling within this category need to ensure their compliance with the revised FINMA anti-money laundering guidelines.

How EY can support you to ensure compliance with the new due diligence obligations

As one of the leading consulting companies worldwide we are experienced in supporting clients with the implementation of new legal regulations in order to guarantee compliance with new due diligence requirements.


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