New legal framework for the supervision of banks and investment firms

On February 1, 2025

• the Act of December 5, 2024 on the Activities and Supervision of Banks, Financial Holding Companies and Mixed Financial Holding Companies (Banking Act; BankA);
• the Act of December 5, 2024 on the Provision of Investment Services and the Exercise of Investment Activities (Investment Services Act; WPDG);
• the Act of December 5, 2024 on the Activities and Supervision of Investment Firms (Investment Firms Act; WPFG); and
• the Act of December 5, 2024 on the Operation and Supervision of Trading Venues and Stock Exchanges (Trading Venues and Stock Exchanges Act; HPBG)

in force. Together, these laws form the new legal framework for the supervision of banks and investment firms in Liechtenstein. The respective implementing ordinances enter into force at the same time as these laws.

The new legal framework brings a number of systematic changes for banks and investment firms:

• From February 1, 2025, the regulatory requirements for banks and (mixed) financial holding companies under banking law will result from Regulation (EU) No. 575/2013 (CRR) and the new BankA. In addition to the new Banking Ordinance (BankO), the government has also issued a new Banking Accounting Ordinance (BankO), which exclusively contains the accounting regulations for banks.
• The regulatory requirements for investment firms, on the other hand, will in future be set out in Regulation (EU) 2019/2033 (IFR) and the new WPFG.
• The requirements for banks and investment firms under the WPFG for the provision of investment services and/or investment activities ("conduct of business requirements") can be found in the new WPDG from February 1, 2025.
• The requirements for the operation of trading venues (MTF/OTF, systematic internalizer) will result from the new HPBG from 1 February 2025.

The new BankG also brings a number of changes in terms of content. The following points in particular are worth highlighting:

• Basic terms such as "bank", "deposit", "credit" or "professional" have been adapted in scope and content to the EEA legal framework and the interpretations of EEA law by the European Banking Authority (EBA) and the European courts.
• The banking transaction catalog has been revised and new banking transactions have been included.
• The procedure and legal consequences in the event of the expiry or withdrawal of a license have been revised. From February 1, 2025, it will only be possible to revoke a license after all outstanding banking transactions have been settled. In the event that a license is withdrawn while a bank is still in operation, the FMA must appoint a liquidator to wind up all open banking transactions. Neither the expiry nor the withdrawal of the license will lead to the automatic winding-up and liquidation of the company in the future.Functions in the management or board of directors of a bank may only be taken up after prior approval has been granted by the FMA. In the case of banks of significant importance, this prior approval must also be obtained for holders of key functions.Banks must take into account the separation of the "front office" and "back office" divisions when designing their organizational structure.
• The requirements for the risk management function and the compliance function are defined at statutory level, taking into account European standards.
• The approval and notification requirements have been modernized. In particular, changes to the business regulations will require approval from February 1, 2025.

The relevant FMA guidelines, notices and instructions have been adapted to the new legal basis.

This content has been translated using a fully automated machine translation tool. Some content may not be accurately translated. More information.