Licensing requirements for foreign control

Under the Banking Act, which by analogy also applies to securities firms in this regard, Swiss-controlled banks and securities firms need an additional licence when they transfer to foreign control.

What does “foreign control” mean?

Swiss banks and securities firms 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 firms, as well as to branches of foreign banks and securities firms.

Assessment of additional licensing projects

FINMA examines projects that may give rise to an additional licensing procedure before an application is submitted.

The purpose of this preliminary review is to enable FINMA to familiarise itself with the main ideas of the project and to make an initial regulatory assessment. The initiators of the project thus receive valuable information at an early stage on any obstacles to licensing or other important issues.

FINMA decides whether a meeting is appropriate after receiving the project presentation. Requests to this effect should be addressed in an official language or in English to the Authorisation section of the Banks division.

Assessments of additional licensing projects are subject to a fee. The fee is based on the Fees and Levies Ordinance .

Contact: authorization@finma.ch