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Banking Regulations in Liechtenstein

Overview

Liechtenstein has strict regulations in place for banks operating within its borders. The Financial Market Authority (FMA) is responsible for overseeing and regulating these institutions.

Key Requirements

• Initial Capital: Banks must have an initial capital of at least 1 million Swiss francs or its equivalent in euros or US dollars.
• Customer Relationships: Banks’ relationships with customers and other third parties are governed by the Liechtenstein Civil Code (ABGB).
• Contract of Mandate: The contract of mandate is commonly used in banking, where the agent (bank) procures transactions on behalf of the principal.

Customer Protection

• General Terms and Conditions: These must meet certain criteria to be valid and applicable.
• Unusual Provisions: Unusual provisions that are detrimental to customers may not become part of the contract if they were not made known to the customer.
• Consumer Protection Act: Certain provisions in the Consumer Protection Act (KSchG) supersede those in the ABGB.

Cross-Border Banking

• Licence Requirements: Banks must have a licence from the FMA to operate in Liechtenstein.
• EEA Countries: Under the freedom to provide services, banks from EEA countries may operate in Liechtenstein without a licence if their home country has notified the FMA.
• Third Countries: Banks from third countries may not provide banking services in Liechtenstein unless on a “reverse solicitation” basis.

Conciliation Board

• Extrajudicial Resolution: The extrajudicial conciliation board was introduced to settle disputes between customers and banks.
• Mediation Process: The conciliation board acts as a mediator, encouraging discussions between the disputing parties and leading them to a mutually acceptable solution.