Financial services

⚡tl;dr financial services are services related to financial instruments , which include shares, bonds, and derivatives, but not currencies cryptocurrencies can either be qualified as a financial instrument or as a currency btc and eth, for example, qualify as currencies if you're a service provider, you might have to get a license granted by finma to be able to offer your services assess early in your journey whether such a license is required aml docid\ jx6dfvvmbievbffk5wgbh obligations must, in any case, be complied with book a free call with us what is it? the key criterion is that financial services are services that are provided in relationship with financial instruments the notion of financial instruments is defined by law and encompasses notably shares, bonds, and derivatives the relevant criterion is whether the instrument can lead to the payment of dividends ; the speculative characteristic of the instrument is irrelevant the notion of services is rather wide and includes investment advisory or personalized advice general advice is usually not considered a financial service and is therefore not regulated as such if the services you provide only relate to currencies (e g , chf usd transactions), you will likely only be subject to aml docid\ jx6dfvvmbievbffk5wgbh and not to the financial services related regulations when providing crypto related services , the key criterion is whether the relevant crypto is to be considered as a currency or a security btc and eth are considered as a currency, but share tokens are considered as securities what do i have to do? if you are a financial services provider (according to the above definition), you become potentially subject to various laws such as the financial services act (fsa), the financial institutions act (fia), the financial infrastructure act (fmia), and even the banking act (ba) this qualification means that you might have to be granted a license by the finma to provide your services the first thing to do is assess your obligations and understand if you can leverage some of the applicable exceptions to remain outside of the finma license scope while providing your services here's an overview of the different scopes of these laws additionally, there are two important things to keep in mind all financial services providers are, in any case, subject to aml docid\ jx6dfvvmbievbffk5wgbh requirements there's a backward compatibility , meaning, for example, that a bank may also be a portfolio manager financial services act ( finsa ) if you are only subject to the fsa, there's no formal license to be obtained from finma you have to register and might have to issue a prospectus to offer equity financial institutions act ( finia ) if you become subject to the fia, you need to obtain a formal license from finma for the services you provide; this can notably be wealth, fund, or portfolio management or a company dealing securities for others this means that you must apply, and finma must formally authorize you to provide your services financial infrastructure act ( finmia ) the fmia applies to regulated exchanges like six or the bern exchange it is likely not relevant for your company banking act ( ba ) the next big step is the banking act this is the biggest license in switzerland technically, banks receive short term loans from their customers (e g , money deposited in your account) and grant long term loans to their customers (e g , to buy a house) the main risk for banks is that all customers withdraw their money as this would impeach the bank to give long term loans because of this risk, the ba has a (very) broad definition that states that an institution is subject to the ba if a company accepts deposits from the public, i e , from more than 20 persons, or publicly advertises this activity in other words, the ba is applicable if more than 20 people would lose their money if this institution went bankrupt however, there are some exceptions 60 days rule if the money of a given person is kept by the company for less than 60 days, this person doesn't count in the 20 people limit up to chf 1 million if the total amount of money that might be lost is lower than chf 1 million, the company is not subject to the ba in such cases, it must, however, be disclosed that the deposit insurance scheme of the finma doesn't apply, meaning that this money might actually be lost and will not be covered by finma if the company goes bankrupt up to chf 3'000 per user if the deposited amount per user is less than chf 3'000, these users don't count in the 20 people limit best practices sector specific regulations the applicable regulatory framework and its impact on the business plan are fully understood and a conscious decision on how to approach regulation is taken how do i get this done? assess early in your entrepreneurial journey whether your envisioned business will be subject to a license this can be a major roadblock however, if the "problem" is known early enough, you can design your services in a way that you can avoid the license requirements, or you can build your company in a compliant way check out our finreg packages and book a free call with us to understand how we can support you