What layer of compliance does SRO supervision cover?
An SRO is a self-regulatory organization recognized by the Swiss Financial Market Supervisory Authority (FINMA) and supervises its members' performance of anti-money-laundering obligations in accordance with the law. FINMA's guidance on fintech lists virtual currency exchange, payment and certain wallet activities as businesses requiring review of anti-money-laundering requirements. Therefore, SRO membership is not devoid of regulatory significance, but it also must not be promoted as FINMA having approved all of the company's products, confirmed the safety of client assets, or guaranteed the company's solvency.
After "the client has paid," how does the legal relationship change?
The key to entering the scope of other licenses is not merely whether the wallet is called custody, but what assets the client hands over to whom, how the assets are kept, whether the company may use them, and whether the client obtains a right to return of the original assets or a claim for repayment against the company. FINMA explains that public deposits, custody of certain crypto assets and securities-related business may involve banking, FinTech or other licenses. Recording client funds on the company's internal ledger while holding only an SRO certificate cannot replace this classification.
Compare instant exchange with a long-term balance
Assume Model A completes the exchange immediately after confirming the transaction and delivers the agreed assets directly to the client; Model B instead lets the client retain a long-term balance withdrawable at any time, with the company centrally controlling the assets. Both may require anti-money-laundering arrangements, but the fact that Model A's SRO route is viable does not mean Model B requires no other license. If the balance is further invested, lent out or promised a return, the nature changes again. FINMA's existing FinTech license page expressly states that the relevant assets it is permitted to accept may not be invested and bear no interest, showing that a "FinTech license" itself is not an unlimited right to conduct deposit-taking business.
Client protection cannot rely on a membership directory alone
FINMA notes that client assets at FinTech institutions do not automatically enjoy bank deposit protection and requires that clients be informed of the relevant arrangements. SRO membership certainly cannot be used to make an equivalent promise. When choosing a structure, it is advisable to design at the same time the ownership of assets, account or wallet segregation, reconciliation, return and wind-down processes, and to keep them consistent with client contracts. For projects with unclear boundaries, the complete model may be explained to FINMA before applying; when serving overseas clients, the destination rules must also be independently verified, as Swiss status itself does not replace the counterparty's market access requirements.
Recommended actions
- Verify whether the SRO is recognized by FINMA, whether the company is a valid member, and whether the declared activities are consistent with the actual products.
- Prepare a table of fund and asset rights, explaining item by item the custody, rights of use, repayment or return obligations and client bankruptcy risk.
- Assess banking, FinTech and other licenses separately for long-term balances, collective custody, securities or yield functions, and do not carry over the conclusion from the original exchange model.
- Accurately disclose the regulatory nature and asset protection in marketing materials and client contracts; do not state "FINMA guarantee" or unsupported deposit protection.
Information note: This article provides general information and does not replace legal advice based on specific facts.
References
- FinTech—Authorisation requirements — Swiss Financial Market Supervisory Authority FINMA
- FinTech licence — Swiss Financial Market Supervisory Authority FINMA
- Authorised institutions, individuals and products — Swiss Financial Market Supervisory Authority FINMA
