What needs to be observed

For every FinTech company, it must be clarified whether the intended activity falls within the scope of the Liechtenstein anti-money-laundering law (Due Diligence Act; SPG) and whether the activity may be subject to the licensing requirement.

Due diligence

Due diligence encompasses obligations that serve to prevent money laundering and terrorist financing. These provisions require in particular that contracting parties are identified and monitored and that effective measures must be available to prevent money laundering and terrorist financing. The scope of due diligence obligations is given by Article 5 of the Due Diligence Act (SPG); in certain exceptional cases, Article 10 SPG provides for simplified due diligence.

Financial service providers subject to the licensing requirement – such as banks, asset managers, and insurers – are subject to due diligence, but also activities not subject to any licensing requirement under financial market law, such as real estate brokers and dealers in goods. A complete list of all persons subject to due diligence can be found in Article 3 SPG.

Is my FinTech subject to due diligence?
  • Do you accept third-party assets or manage them?
  • Do you make investments on behalf of clients?
  • Do you execute payments for clients?
  • Do you issue e-money or a virtual currency?
  • Do you exchange one currency into another, or do you enter a currency into a virtual system?
  • Do you serve as an intermediary for transactions?

If you answer any of these questions in the affirmative, then you most likely engage in an activity subject to the Due Diligence Act.

 

Licensing requirement

Some activities are subject to a licensing requirement under specialized legislation. It is always determined on a case-by-case basis whether a business model includes activities subject to the licensing requirement under financial market law. In all cases, it is recommended to consult with the FMA in advance, given that violations of the financial market rules may incur penalties.

Is my FinTech subject to the licensing requirement?
  • Do you accept third-party assets or manage them?
  • Do you make investments on behalf of clients?
  • Do you execute payments for clients?
  • Do you issue e-money or a virtual currency?
  • Do you exchange one currency into another, or do you enter a currency into a virtual system?
  • Do you serve as an intermediary for transactions?

If you answer any of these questions in the affirmative, then you most likely engage in an activity subject to the licensing requirement.

 

What legal foundations may be relevant to me?

The following remarks are intended to provide an illustrative overview of possible business models and potentially applicable legal foundations.

Please note that the selection of laws is in no way exhaustive and/or binding, but rather serves only as guidance. It is always determined on a case-by-case basis whether a business model includes activities subject to the licensing requirement under financial market law. In all cases, it is recommended to consult with the FMA in advance, given that violations of the financial market rules may incur penalties.

For the business models listed as examples, the following legal foundations may be relevant:

Payment

My FinTech...

  • ...maintains payment accounts.
  • ...carries out payment services.
  • ...offers payment solutions.
  • ...issues payment instruments.

In this case, the following business models and legal foundations may be relevant:

Mobile payment app Payment Services Act (ZDG), E-Money Act (EGG)
E-commerce payment solution ZDG, EGG
Micro payment service ZDG, EGG
Travel cash in digital form EGG

 

Advisory

My FinTech...

  • ...provides investment advice.
  • ...prepares risk profiles.
  • ...shares investment strategies.
  • ...analyses financial instruments.

In this case, the following business models and legal foundations may be relevant:

Robo-advice Asset Management Act (VVG)
Social trading VVG

 

Investing and asset management

My FinTech...

  • ...issues financial instruments.
  • ...offers hedging instruments.
  • ...uses automated investment portfolios.
  • ...uses trading algorithms.

In this case, the following business models and legal foundations may be relevant:

Bitcoin derivatives Banking Act (BankG)
Automated trading systems BankG, Asset Management Act (VVG)

 

Core banking

My FinTech...

  • ...maintains accounts.
  • ...grants loans.
  • ...is engaged in the custodian business.

In this case, the following business models and legal foundations may be relevant:

Online account maintenance Banking Act (BankG)
Online lending BankG

 

Financing and funding

My FinTech...

  • ...grants loans.
  • ...arranges loans.
  • ...issues financial instruments.
  • ...arranges funding or venture capital.

In this case, the following business models and legal foundations may be relevant:

p2p lending  Banking Act (BankG)
Crowdfunding BankG
Crowdlending BankG
p2p factoring -

 

Infrastructure

My FinTech...

  • ...operates a trading platform.
  • ...offers digital wallet services.
  • ...develops and/or offers software solutions.

In this case, the following business models and legal foundations may be relevant:

Settlement using blockchain   Banking Act (BankG)
Trading platform using blockchain BankG
Virtual currency exchange BankG
Wallet operator Payment Services Act (ZDG)
p2p marketplace BankG, Asset Management Act (VVG)
Development and provision of banking software -

 

Compliance/Risk/Security

My FinTech offers services in the following areas:

  • AML/CFT
  • Risk management
  • Compliance management
  • Audit and controlling

In this case, the following business models and legal foundations may be relevant:

AML outsourcing  Banking Act (BankG)
Compliance outsourcing BankG
Risk monitoring AIFM Act (AIFMG), BankG
Accounting and audit services Professional Trustees Act (TrHG)

 

Insurance

My FinTech...

  • ...underwrites risks.
  • ...arranges the assumption of risks by third parties.
  • ...organizes or manages insurance policies.

In this case, the following business models and legal foundations may be relevant:

Micro insurance Insurance Supervision Act (VersAG)
Online insurance broker VersVermG
Friend(in)surance VersAG
Pay-per-use insurance VersAG

 

Data services

My FinTech...

  • ...offers information processing and preparation.
  • ...offers data feeds.
  • ...offers analysis tools.

In this case, the following business models and legal foundations may be relevant:

Financial information via smartphone Banking Act (BankG), Asset Management Act (VVG), Investment Undertakings Act (IUG), Professional Trustees Act (TrHG)
Custody services TrHG
Research and analytics from different sources  BankG, VVG, IUG, TrHG

 

Pension and savings

My FinTech...

  • ...offers savings and pension plans.

In this case, the following business models and legal foundations may be relevant:

Online pension schemes Pension Funds Act (PFG), Occupational Pensions Act (BPVG)

 

 

Additional questions

The FMA and its competence team are happy to answer any questions at fintech[at]fma-li.li. The FMA supports and accompanies FinTechs during the licensing process. The FMA also actively seeks out contact with innovative financial service providers and offers a constructive exchange.

As a supervisory authority, however, the FMA is unable to offer general legal advice or an evaluation of business models in regard to their market readiness or in regard to risks and opportunities.

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