Licensing requirements for foreign control

Swiss-controlled banks need an additional licence when a controlling stake is transferred to foreign ownership as do foreign-controlled banks when significant changes in their foreign control occur.
Article 3ter para.1 of the Banking Act states that Swiss-controlled banks and securities dealers need an additional licence when they transfer to foreign control.

What does «foreign control» mean?

Swiss banks and securities dealers qualify as foreign-controlled when foreigners holding qualified participations directly or indirectly hold more than half of the voting rights or exert a controlling influence in any other way.

"Foreigners" are individuals who have neither Swiss citizenship nor a type C Swiss residence permit. Legal entities are regarded as foreign if their registered office is outside Switzerland or if they are directly or indirectly controlled by foreigners.

Conditions for an additional licence

FINMA grants an additional licence subject to the following conditions:

  • The countries in which the qualified participants are resident or domiciled guarantee reciprocal rights. (Reciprocal rights do not have to be verified if international agreements to this effect exist, e.g. with member states of the World Trade Organization (WTO).)
  • If the transfer to foreign control causes the bank to become part of a financial group or a financial conglomerate, the foreign supervisory authority may need to give its consent and be in a position to ensure consolidated supervision of the group as a whole.

Changes in foreign control

When the foreign holders of qualified participations in a foreign-controlled institution change, the institution must apply to FINMA for a further additional licence. This legal requirement applies to Swiss banks and securities dealers, as well as to branches of foreign banks and securities dealers.