Financial Crime World

Beneficial Owners Notified to Companies: A Game-Changer for Swiss Fintech

In a major development for Switzerland’s fintech industry, the country’s financial regulator, FinSA, has introduced new regulations requiring companies to notify beneficial owners of asset tokens offered to the public or placed with more than 20 clients. This move is expected to eliminate the need for separate registers and streamline the process for companies operating in the sector.

Stablecoins: A Regulatory Gray Area

FinSA’s guidelines on initial coin offerings (ICOs) have also shed light on the regulatory treatment of stablecoins, which are digital currencies pegged to a specific asset or currency. While many stablecoins confer contractual claims against the issuer or direct ownership rights, others may not. As a result, regulatory requirements vary depending on the assets backing the stablecoin and the rights of its holders.

Key Takeaways

  • Regulatory treatment of stablecoins depends on the assets backing the coin and the rights of its holders.
  • FinSA’s guidelines provide clarity on the regulatory framework for ICOs and stablecoins.

AML Compliance: A Key Concern

Compliance with anti-money laundering (AML) regulations is another key concern for fintech companies in Switzerland. FinSA has lowered the AML threshold for virtual currency transactions from CHF 5,000 to CHF 1,000 within 30 days, and emphasized that anyone facilitating the transfer of virtual currencies is subject to Swiss AML regulations.

Key Takeaways

  • Lowered AML threshold for virtual currency transactions.
  • All individuals facilitating virtual currency transfers are subject to Swiss AML regulations.

Payment Services: A Lightly Regulated Sector

In contrast to the European Union’s payment services directive II and e-money directive, Switzerland has no payment-specific regulatory framework. Payment activities are usually lightly regulated by being only subject to Swiss AML-regs or strictly regulated by being subject to Swiss AML- and banking regulations.

Key Takeaways

  • Switzerland lacks a payment-specific regulatory framework.
  • Payment activities are lightly regulated or subject to strict regulations.

DAOs: A New Form of Organization

Decentralized autonomous organizations (DAOs) are also gaining traction in Switzerland, with their potential benefits including autonomy and efficiency. While the legal form of a DAO is not defined in Swiss law, it can be recognized as a collective investment scheme or simple partnership under certain circumstances.

Key Takeaways

  • DAOs offer autonomy and efficiency.
  • The legal form of a DAO is not defined in Swiss law but can be recognized under certain circumstances.

New EU Law Impacts Swiss Fintech

The new EU law on beneficial ownership has implications for Swiss fintech companies that operate internationally. As of January 1, 2023, companies operating in Switzerland must notify the authorities of their beneficial owners and maintain accurate records of ownership structures.

Key Takeaways

  • The new EU law on beneficial ownership impacts Swiss fintech companies.
  • Companies operating in Switzerland must notify authorities of their beneficial owners and maintain accurate records.

Conclusion

In conclusion, the introduction of new regulations and guidelines by FinSA is expected to have a significant impact on Switzerland’s fintech industry. Companies operating in the sector must comply with these requirements to avoid penalties and ensure continued growth and innovation in the sector.