Authorisation requirements for banks
Under Article 1a of the Banking Act, companies mainly active in the financial sector that accept deposits from the public in excess of CHF 100 million on a professional basis or solicit such deposits publicly are considered as banks. Any company that accepts deposits from the public of up to CHF 100 million on a professional basis or solicits such deposits publicly and invests or pay interest on these public deposits is also considered a bank. Finally, any company offering financing of any kind on its own account to an indeterminate number of individuals or companies that are not part of the same economic unit as itself and refinancing its business to a considerable extent with a number of banks that do not own significant shareholdings in it also qualifies as a bank.
Banks require a licence to go into operation and are subject to prudential supervision by FINMA.
Licensing requirements
For a licence to be granted, there must be no doubt that the applicant meets or can meet all of the licensing requirements. The most important are:
- fully paid-up minimum capital of at least CHF 10 million;
- a business plan showing that compliance with capital adequacy, risk diversification and liquidity rules can be ensured at all times;
- guarantee of irreproachable business activity by qualified participants and members of ultimate strategic and executive management;
- precise factual and geographical description of the business in the articles of association, partnership agreement and business rules(business must be compatible with the bank’s finances and organisation);
- management of the bank from Switzerland;
- separation of ultimate strategic and executive management;
- effective separation of internal functions – in particular lending, trading, asset management and settlement;
- effective risk management – in particular appropriate identification, limitation and monitoring of market, credit, default, settlement, liquidity, image, operational and legal risks;
- effective internal control system, internal audit function independent of executive management;
- appointment of a recognised audit firm for the licensing process;
- appointment of a recognised regulatory audit firm for ongoing supervision;
- applicants under foreign control: reciprocal rights on the part of the countries where qualified participants are domiciled;
- if the bank is part of a financial group: adequate consolidated supervision by a recognised supervisory authority.
Duration of the process
The bank licensing process takes place in constant dialogue with the applicants. The duration depends on the quality and complexity of the application and the current workload. In the case of applications with a foreign connection, the time it takes to receive a response from the competent foreign supervisory authorities must also be taken into account.
Contact for questions on the licensing process
The Authorisation section of the Banks division (authorization@finma.ch).
