FINMA facilitates online identification for fin intermediaries’ clients, backs addition of new licenses


The Swiss Financial Market Supervisory Authority (FINMA) today highlighted its efforts to go hand in hand with financial innovation by making two announcements: one concerns the new rules for onboarding clients by financial intermediaries; the other concerns the licensing of financial innovation companies.

  • Digital client identification now possible

A growing number of financial intermediaries interact with their clients via the internet and mobile devices, FINMA notes. FINMA’s new circular on video and online identification (FINMA Circ. 2016/7), which comes into force on March 18, 2016, determines the anti-money laundering due diligence requirements for digital business.

Financial intermediaries will be allowed to onboard clients by means of video transmission, putting this form of identification on a par with in-person identification. As other forms of online identification, apart from video identification, are also permitted, the circular covers a range of methods of onboarding via digital channels.

  • FINMA supports new licensing category

FINMA voiced its support for the introduction of a new licensing category for financial innovators and a licence exempt area (sandbox). This licensing category would apply to business models which carry out some banking activities, but with limited acceptance of client assets and no lending activity.

Financial services providers that do not accept more than CHF 50 million in deposits could apply for this type of financial innovators’ licence if they hold 5% of the deposits and at least CHF 300,000 capital as collateral. The introduction of such licences is set to lower the entry threshold for providers of payment systems, applications for managing assets digitally and crowd funding platforms. A fully licence-exempt environment would be conceivable, particularly for start-up companies, up to a deposit threshold of CHF 200,000 and irrespective of the number of depositors.

The regulator is currently discussing a range of ideas with the banking sector and the competent authorities.

You can view the full announcement from the Swiss regulator by clicking here.

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FINMA facilitates online identification for fin intermediaries' clients, backs addition of new licenses

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