Insights

Stablecoin issuance projects have become increasingly important since 2019. In the new FINMA Guidance 06/2024, the supervisory authority provides information on the financial market law aspects of stablecoin projects and their impact on supervised institutions. In particular, FINMA defines certain minimum requirements for default guarantees from banks, which are often used by stablecoin issuers so that they are not subject to authorisation under banking law. FINMA also draws attention to the increased risks of money laundering and terrorist financing as well as the circumvention of sanctions and specifies the due diligence obligations of stablecoin issuers under anti-money laundering law.

Artificial intelligence (AI) has been on the regulatory radar screen in Switzerland at least since the Federal Council's announcement in November 2023. At the same time, FINMA has formulated initial regulatory expectations for financial service providers when dealing with AI. The AI regulatory process in the European Union (EU) is even further advanced. The final version of its AI regulation ("AI Act") is expected in the first quarter of 2024. These developments also require Swiss financial service providers who wish to use AI systems to familiarise themselves with the planned regulation.

FINMA conducted a survey on money laundering risk analysis at more than 30 banks in spring 2023 and identified significant deficits. All money laundering risks to which a financial intermediary is exposed must be identified, recorded, analysed and measured. This also includes setting a risk tolerance with threshold values. Thus, a complete money laundering risk management was expected, which FINMA finally published in its Guidance 05/2023 of 24 August 2023.

Recently, especially since the Russia-Ukraine conflict, they have increasingly been in the focus of the general public: national and international sanctions. They are relevant and challenging for a large number of Swiss companies, especially for the financial sector. If sanctions are violated, there is a risk of reputational damage as well as criminal and regulatory consequences.

AML/KYC background checks on clients and prospects

A new bill is to be submitted for consultation this summer, which includes the introduction of a central register of beneficial owners of legal entities in Switzerland.