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Fintech Market Overview

This article does not constitute legal advice.

Crowdfunding in Switzerland

Fintech Software

Fintech companies may market their products and services under the same rules as established financial service providers. Restrictions apply, in particular, if a company looks for funds and contacts more than 20 potential investors (see Section II.i).1

Collective investment schemes governed by the CISA are assets raised from investors for the purpose of collective investment, which are managed for the account of the investors, whereby the investment requirements of the investors are met on an equal basis. Open-ended collective investment schemes are organised under company or contract law; closed schemes are organised under company law only. No licence is required for a collective investment scheme in the form of a limited stock company if it is either listed or if only qualified investors participate.1

Under Swiss law, crowdfunding is permitted and does not per se trigger a licence requirement. However, if crowdfunding includes 'assets raised from investors for the purpose of collective investment' and these crowdfunding assets are managed for the account of the investors (by a third party), subject to equal treatment provisions, they would qualify as collective investment scheme within the meaning of the CISA. In this case, the respective requirements according to the CISA would have to be adhered to.1

Crowd-lending, also known as peer-to-peer lending, is not per se regulated. However, depending on its specific set-up, it may fall within the scope of the Banking Act, the FIA, the AMLA, etc. In addition, a consumer credit agreement is a contract whereby a creditor grants or promises to grant credit (not exceeding 80,000 Swiss francs) to a consumer in the form of a deferred payment, a loan or other similar financial accommodation. In general, the CCA will be applicable to crowd-lending activities if the counterparty were to qualify as a consumer. In this case, the respective rules of the CCA would have to be adhered to; for example, the maximum interest possible for consumer credits currently amounts to 10 per cent.1

Platforms providing crowdfunding and crowd-lending services do not require a licence if the investors' funds are directly sent to the projects (i.e., not through the platform). If funds are sent via platform accounts, this can only be done without a banking licence if the account is non-interest bearing, the funds are kept no longer than 60 days on the account and the client is informed that the platform does not hold a licence. The platform will need to register as a financial intermediary with an SRO and to comply with AML obligations.1

Even the project developer may qualify as a bank if it accepts more than 20 loans and the amount exceeds 1 million Swiss francs.1

Loans can be traded on secondary markets, subject to compliance with AML laws. However, the transfer of a loan requires either transfer of the contract or assignment of the claim. Assignment of claims can only be done in writing; in other words, with a handwritten (or electronic) signature of the assignor (special rules apply to DLT tokens).1

Banking in Switzerland

Fintech in Switzerland

Fintech in other countries

Let's introduce you

Swiss Fintech Lawyers

Kristina Berkes

Kristina Berkes

Participation as a lawyer at investment venture funds, leading venture M&A deals in IT, supporting iGaming and business assets

Maxim Minaev

Maxim Minaev

We provide legal and organizational services for the creation, structuring and development of fintech companies

Notes
  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/switzerland
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