Financial Crime World

EURO ZONE AND US DOLLAR HOLDERS FACE NEW BANKING REGULATIONS IN LIECHTENSTEIN

Liechtenstein’s Financial Market Authority (FMA) has introduced new regulations for banks operating in the country, aimed at strengthening financial stability and consumer protection.

Minimum Capital Requirements

The new rules require investment firms to have a minimum capital of at least 730,000 Swiss francs or its equivalent in euros or US dollars. This move is designed to ensure that banks are better equipped to handle potential risks and maintain financial stability.

Customer Relationship Guidelines

The FMA has also outlined strict guidelines governing the relationship between banks and their customers, including:

  • Third-party transactions must be clearly disclosed to clients.
  • Contracts between banks and customers are subject to general rules and provisions on contracts and legal transactions.
  • Banks must disclose all fees, commissions, or grants received from third parties to their clients, unless the client has explicitly waived this right.

Transparency in Banking Relationships

The FMA emphasizes the importance of transparency in banking relationships. Any unusual provisions in bank contracts must be clearly disclosed to customers.

Cross-Border Banking Activities

The new regulations also address cross-border banking activities:

  • Banks from European Economic Area (EEA) countries are allowed to operate in Liechtenstein under a licence issued by the FMA.
  • Non-EEA banks may only provide services through a branch in Liechtenstein or on a “reverse solicitation” basis.

Conciliation Board

The FMA has established an extrajudicial conciliation board to settle disputes between customers and banks. The board acts as a mediator to resolve complaints submitted by customers, with the goal of encouraging discussions between disputing parties and reaching mutually acceptable solutions.

Conclusion

These new regulations aim to strengthen Liechtenstein’s financial sector while providing greater protection for investors and consumers. As the country continues to attract foreign investment, these measures are expected to enhance its reputation as a stable and reliable financial hub in Europe.