RZ_Bulletin_Regulatory Innovations_SB_Preview_Web

Swiss Federal Council publishes Report on Banking Stability

<h3>I. Überblick</h3>
<p>Die Eidgenössische Finanzmarktaufsicht FINMA (<strong>FINMA</strong>) hat am 1. Februar 2024 die öffentliche Anhörung zum neuen Rundschreiben-Entwurf «Naturbezogene Finanzrisiken» eröffnet. Die Anhörung dauert bis 31. März 2024. Dieses Rundschreiben soll am 1. Januar 2025 in Kraft treten; es sind Übergangsfristen vorgesehen.</p>
<p>Mit diesem Rundschreiben konkretisiert die FINMA ihre Aufsichtspraxis zum Management von naturbezogenen Finanzrisiken. Hauptfokus legt die FINMA auf Anforderungen in den Bereichen Governance und Risikomanagement.</p>
<p>Dieses Rundschreiben richtet sich primär an Banken und Versicherer, die der Aufsicht der FINMA unterstehen. Aufgrund ihres unterschiedlichen Geschäftsmodelles sind Banken gegenüber naturbezogenen Finanzrisiken unterschiedlich exponiert und unterliegen deshalb teilweise anderen Anforderungen. Die nachfolgenden Ausführungen behandeln diese bankenrechtlichen Anforderungen jedoch nur am Rande und fokussieren sich auf die neuen Vorgaben für Versicherer.</p>
<h3>II. Geltungsbereich</h3>
<p>Das Rundschreiben richtet sich in erster Linie an Banken und Versicherer. Bei Instituten, die Teil einer Finanzgruppe oder eines Finanzkonglomerats sind, reicht es aus, wenn die oberste Konzernobergesellschaft die Anforderungen des Rundschreibens erfüllt.</p>
<p>Aus Gründen der Proportionalität und des risikobasierten Ansatzes der FINMA fallen Erst- und Rückversicherungsunternehmen der Kategorien 4 und 5 gemäss Art. 1<em>c</em> bzw. 1<em>d</em> AVO nicht in den Geltungsbereich dieses Rundschreibens. Ausgenommen sind aus den gleichen Überlegungen die Institute des Kleinbankenregimes und die übrigen bewilligungs-, anerkennungs- und registrierungspflichtigen Institute (z.B. Verwalter von Kollektivvermögen, Fondsleitungen, Versicherungsvermittlerinnen) sowie die kollektiven Kapitalanlagen (z.B. SICAV).</p>
<p>Wenn solche ausgenommenen Institute naturbezogenen Finanzrisiken ausgesetzt sind, wird jedoch von ihnen erwartet wird, dass sie diese Risiken angemessen berücksichtigen. Das Rundschreiben soll dabei als Orientierung dienen.</p>
<p>Die Anforderungen des Rundschreibens fokussieren auf die finanziellen Risiken der Versicherer. Die Anforderungen zielen nicht darauf ab, Anlage- oder Zeichnungsentscheidungen eines Versicherers zu beeinflussen oder die Auswirkungen der Geschäftstätigkeiten auf Umweltfaktoren nachhaltiger zu gestalten. Kernpunkt ist, dass solche Entscheidungen unter Berücksichtigung der relevanten kurz-, mittel- und langfristigen naturbezogenen Finanzrisiken vorgenommen werden.</p>
<h3>III. Rechtliche Grundlagen</h3>
<p>Die FINMA hat sich erklärtermassen an den Arbeiten der internationalen Standardsetzungsgremien orientiert. Diese Standards sind nicht verbindlich. Insbesondere darf die FINMA ihre Aufsichtspraxis nur im Rahmen ihres Aufsichtsmandates konkretisieren, der von den übergeordneten finanzmarktpolitischen Zielen und vom Zweck der Finanzmarktgesetze abgesteckt wird.</p>
<p>Nach der Finanzmarktpolitik des Bundesrats soll der Staat Rahmenbedingungen schaffen, die eine nachhaltige wirtschaftliche Entwicklung und Wohlstand ermöglichen. Pfeiler dieser Finanzmarktpolitik sind das Primat marktwirtschaftlicher Lösungen und die Subsidiarität staatlichen Handelns. Nur wenn trotz der bestehenden Rahmenbedingungen Marktimperfektionen oder Marktversagen entstehen, soll der Staat eingreifen und regulatorische Massnahmen vorsehen.</p>
<p>Die zentralen Ziele der Finanzmarktregulierung sind der Individualschutz (Gläubiger-, Anleger- und Versichertenschutz), die Systemstabilität sowie die Gewährleistung der Funktionsfähigkeit der Finanzmärkte. Diese übergeordneten Ziele kommen im Art. 4 FINMAG zum Ausdruck.</p>
<p>Im Rahmen ihrer Aufsichtstätigkeit befasst sich die FINMA grundsätzlich mit allen potenziellen Risiken für Finanzinstitute und für das Finanzsystem. Ihr Aufsichtsmandat wird jedoch gestützt auf die finanzmarktpolitischen und -rechtlichen Vorgaben definiert. Dies muss auch bei den Anforderungen an das Management von naturbezogenen Finanzrisiken beachtet werden. Andernfalls fehlt eine rechtliche Rechtfertigung für die neuen Regeln im Rundschreiben.</p>
<p>Deshalb sollten sich die Anforderungen im Rundschreiben auf das Mandat der FINMA, Gläubigerinnen und Gläubiger, Anlegerinnen und Anleger und Versicherte sowie die Funktionsfähigkeit der Finanzmärkte zu schützen, beschränken. Zur Erreichung dieser Schutzziele muss sich das Rundschreiben auf den Bereich des Risikomanagements beschränken. Zusätzliche Anforderungen im Governance-Bereich, die über ein angemessenes Risikomanagement hinausgehen, sind deshalb problematisch, zumal es keine Anhaltspunkte gibt, dass Marktimperfektionen oder Marktversagen beim Umgang mit Umweltrisiken durch Versicherer bestehen.</p>
<h3>IV. Naturbezogene Finanzrisiken</h3>
<p>Der sachliche Anwendungsbereich des Rundschreibens umfasst die naturbezogenen Finanzrisiken. Demgegenüber beschränken sich die Standards der <em>International Association of Insurance Supervisors</em> (<strong>IAIS</strong>), auf denen die Anforderungen des Rundschreibens nach Angaben der FINMA basieren, auf klimabezogene Risiken (vgl. IAIS-<em>Application Paper on the Supervision of Climate-related Risks in the Insurance Sector</em>).</p>
<p>Im Gegensatz zu Klimarisiken berücksichtigen die Naturrisiken über den Klimawandel hinaus alle potenziell relevanten naturbezogenen Risikotreiber, wie z.B. der Verlust der Biodiversität oder die daraus resultierenden Beeinträchtigungen von Ökosystemleistungen. Im Verständnis der FINMA bilden die klimabezogene Finanzrisiken eine Unterkategorie der naturbezogenen Finanzrisiken.</p>
<p>In diesem Zusammenhang ist zu beachten, dass Finanzrisiken im Umweltbereich komplex und wenig erforscht sind. Auch Daten und Methodologie fehlen, um naturbezogene Risiken mit einer gewissen Sicherheit zu modellieren bzw. zu bestimmen. Entsprechend ist es schwierig, die Materialität von naturbezogene Finanzrisiken für Versicherer zu beurteilen. Somit sollten die Anforderungen bezüglich solcher Risiken nur mit Augenmass erfolgen (z.B. bezüglich Szenarioanalysen und Wesentlichkeitsbeurteilungen).</p>
<h3>V. Governance</h3>
<p>Das Rundschreiben gibt Standards für die Aufgaben, Kompetenzen und Verantwortlichkeiten der mit der Oberleitung und der Geschäftsführung befassten Personen (z.B. Verwaltungsrat, Geschäftsleitung) und der unabhängigen Kontrollinstanzen und -funktionen vor. Die Vorgaben, die dokumentiert werden müssen (z.B. im Organisationsreglement), beziehen sich auf die Identifikation, Beurteilung, Bewirtschaftung und Überwachung von naturbezogenen Finanzrisiken sowie die entsprechende interne und externe Berichterstattung.</p>
<p>Im Sinne eines zusätzlichen Gewährserfordernisses müssen diese Organe und Gremien über ausreichende Kenntnisse und Erfahrungen bezüglich naturbezogene Finanzrisiken und den Umgang damit verfügen. Zudem erwartet die FINMA eine Anpassung der Vergütungssysteme, wenn sie nicht geeignet sind, die Risikostrategie des Versicherers bezüglich naturbezogenen Finanzrisiken zu unterstützen.</p>
<h3>VI. Szenarioanalysen</h3>
<p>Um die Auswirkungen von Naturrisiken auf die Versicherungssparten und -produkte unter verschiedenen, plausiblen Annahmen einzuschätzen, müssen die Versicherer zudem Szenarioanalysen durchführen. Darunter wird die kritische Auseinandersetzung mit möglichen, zukünftigen Entwicklungen der naturbezogenen Finanzrisiken und deren Auswirkungen auf den Versicherer verstanden.</p>
<p>Die Szenarioanalyse muss qualitative Überlegungen zu den direkten und indirekten Auswirkungen verschiedener adverser Szenarien von Naturrisiken und die dadurch möglichen Beeinträchtigungen des Geschäftsmodells beinhalten. Diese Szenarien müssen unterschiedliche Zeithorizonte und auch Auswirkungen auf Markt-, Kredit- und Liquiditätsrisiken sowie auf das Asset Liability Management analysieren. Dabei sind auch Ereignisse mit geringer Wahrscheinlichkeit und potenziell grossen Auswirkungen zu erfassen.</p>
<p>Zudem müssen die «grossen» Versicherer (Kategorie 1 und 2) sowie die Versicherer, die gegenüber naturbezogenen Finanzrisiken erhöht exponiert sind, verschiedene Szenarien auch mit quantitativen Methoden analysieren. Ziel dabei ist, die Auswirkungen unterschiedlicher Szenarien präziser einzuschätzen. Die quantitativen Vorgaben sind heikel, da zur Zeit aussagekräftige Daten und Methodologien fehlen, um naturbezogene Risiken mit einer gewissen Sicherheit zu modellieren.</p>
<h3>VII. Risikomanagement</h3>
<p>Die Versicherer sind sodann gehalten, die wesentlichen naturbezogenen Finanzrisiken in die relevanten Prozesse, Richtlinien und Kontrollen ihrer Versicherungstätigkeit zu integrieren. Dies gilt für folgende Bereiche:</p>
<ul>
<li>Art und Ausgestaltung der Versicherungsdeckungen;</li>
<li>Tarifierung, Underwriting;</li>
<li>Steuerung und Überwachung der Versicherungsrisiken, einschliesslich Risikokonzentrationen, -korrelationen und -akkumulationen; und</li>
<li>Schadenreservierung.</li>
</ul>
<p>Die Bewirtschaftung und Überwachung der naturbezogenen Finanzrisiken sowie die Berichterstattung darüber sind in das institutsweite Risikomanagement und interne Kontrollsystem aufzunehmen.</p>
<p>Die Versicherer sind sodann verpflichtet, potentielle Auswirkungen von ausserordentlichen, naturbedingten Ereignissen auf die Aufrechterhaltung und Weiterführung des Geschäftsbetriebs zu analysieren. Dazu gehört insbesondere eine Analyse, wie sich Naturrisiken auf die Personen, Prozesse, Betriebsgebäude, IT-Systeme und sonstige Geschäftsausstattung sowie auf ausgelagerte Dienstleistungen auswirken.</p>
<p>Auch Compliance Risiken sowie potentielle Reputations- und Rechtsrisiken aus dem Umgang mit Naturrisiken sowie die allenfalls daraus resultierenden finanziellen Verluste müssen analysiert werden.</p>
<p>Die FINMA verlangt zudem, dass die Versicherer regelmässig beurteilen, ob die Geschäftsstrategie, das Geschäftsmodell und der Umgang mit den Risiken (z.B. Risikoappetit) mit den allfälligen öffentlichen Erklärungen und gesetzlichen Verpflichtungen übereinstimmen. Ebenso ist die Beurteilung erforderlich, ob die öffentlichen Erklärungen und Verpflichtungen angemessen in der internen Organisation verankert sind.</p>
<h3>VIII. Weitere Anforderungen</h3>
<p>Naturbezogenen Finanzrisiken sind in die <em>Own Risk and Solvency Assessments</em> (ORSA) der Versicherer zu integrieren. Dabei ist der Einfluss dieser Risiken auf das Gesamtrisikoprofil, den gesamten Kapitalbedarf, die Szenarien und den Bedarf für risikomindernde Massnahmen zu berücksichtigen.</p>
<p>Die verantwortlichen Aktuare müssen über wesentliche naturbezogene Finanzrisiken in ihren Berichten an die Geschäftsleitung berichten. Dies setzt entsprechend voraus, dass diese Risiken in der Erfüllung ihrer aufsichtsrechtlichen Aufgaben berücksichtigt werden.</p>
<h3>IX. Übergangsbestimmungen</h3>
<p>Bei den Übergangsbestimmungen wird unterschieden zwischen Institute der Kategorien 1 und 2 sowie der übrigen Kategorien. Die Institute der Kategorien 1 und 2 müssen die Risikoidentifikation, die Wesentlichkeitsbeurteilung und die Szenarioanalysen sowie die Beurteilung der Übereinstimmung von Geschäftsstrategie, Geschäftsmodell, Risikotoleranz sowie Risikomanagement mit den öffentlichen Erklärungen und gesetzlichen Verpflichtungen bereits ab 1. Januar 2025, d.h. dem geplanten Inkrafttreten des Rundschreibens, erfüllen. Die restlichen Anforderungen sind innert Jahresfrist ab Inkrafttreten des Rundschreibens umzusetzen.</p>
<p>Die Institute der übrigen Kategorien müssen die Risikoidentifikation, die Wesentlichkeitsbeurteilung und die Szenarioanalysen sowie die Beurteilung der Übereinstimmung von Geschäftsstrategie, Geschäftsmodell, Risikotoleranz sowie Risikomanagement mit den öffentlichen Erklärungen und gesetzlichen Verpflichtungen innert Jahresfrist ab Inkrafttreten des Rundschreibens erfüllen. Die restlichen Anforderungen sind innert zwei Jahren ab Inkrafttreten des Rundschreibens umzusetzen.</p>


Klimarisiken_Preview_RZ

Neue Regeln für Versicherer zum Umgang mit naturbezogenen Finanzrisiken

<h3>A. Controversial Origins</h3>
<p>On December 20, 2023, the Swiss Financial Market Supervisory Authority (<strong>FINMA</strong>) issued guidance no. 08/2023 on the treatment of staking services under Swiss financial market regulatory laws (the <strong>Guidance</strong>). FINMA&#8217;s Guidance is the result of discussions initiated in connection with the so-called <strong>«DLT Act»</strong> (Federal Act on the Adaptation of Federal Law to Developments in Distributed Ledger Technology) which entered into force on August 1, 2021.</p>
<p>Under the DLT Act, the Swiss Debt Enforcement and Bankruptcy Act and the Federal Act on Banks and Savings Institutions (the <strong>Banking Act</strong>) were amended to provide a legal basis for the segregation of crypto assets held in custody for clients in the event of an insolvency of their custodian if certain requirements were met. Staking in particular led to a debate in connection with one of the relevant requirements.</p>
<p>That said, staking is not a legally defined term and is offered in different forms in practice. It generally consists of the blocking of native crypto assets in order to participate in a validation process of a blockchain that is based on a proof-of-stake protocol. While the holders of staked crypto assets typically receive rewards if the validation is performed correctly, their staked crypto assets may be partially or completely deleted in the case of improper transaction validations («slashing»). In addition, holders of staked crypto assets are subject to the risk of a delay in the return of the blocked crypto assets, as certain proof-of-stake blockchains provide for a lock-up/exit period in the case of an unstaking of the relevant crypto assets.</p>
<p>Earlier this year, FINMA indicated that it may not consider crypto assets held by a custodian on behalf of its clients under a staking set-up, which provides for a lock-up period or involves a slashing risk, to be kept immediately available to the clients at all times within the meaning of Swiss bankruptcy laws and, therefore, not deem them to be segregable in the event of the custodian&#8217;s insolvency. If this approach were followed, the custody of such staked crypto assets would require a banking license under the Banking Act or, if provided by a bank, would be «on-balance sheet» and thereby trigger the increased capital requirements applicable to crypto assets held on such bank&#8217;s balance sheet. FINMA&#8217;s initial position was therefore criticized by both regulated and unregulated market participants.</p>
<p>As a result of the market wide criticism, both FINMA and the newly established Swiss Financial Innovation Desk (FIND) held roundtable discussions with industry representatives to further explore the segregation of staked crypto assets in the event of a custodian&#8217;s insolvency and assess the practical consequences and/or need to clarify or amend the relevant legislative rules. In addition, FINMA conducted a survey among supervised institutions on their staking services.</p>
<p>FINMA&#8217;s Guidance is the result of these discussions and corresponding analyses. It aims to provide guidance on how FINMA will interpret the segregation requirements for staked crypto assets, as well as related issues such as the need for a banking license for staking providers and the impact of staked crypto assets on banks&#8217; capital requirements.</p>
<p>In the following, we provide a summary overview of the question addressed and the key requirements set out in FINMA&#8217;s Guidance and specifically discuss certain measures that regulated providers of staking services, such as licensed banks, should implement in order to avoid that the staked crypto assets held on behalf of their clients become subject to the applicable capital requirements.</p>
<h3>B. What the Two Competing Analyses Entail</h3>
<p>At the heart of FINMA&#8217;s new Guidance is the question of whether staking service providers act as deposit takers or as fiduciaries when staking crypto assets received from their clients.</p>
<p>One analysis is to treat staking service providers broadly <u>as deposit takers</u>, i.e.:</p>
<ul>
<li>clients&#8217; claims for the return of staked crypto assets are merely contractual claims against the staking service provider, and as a result
<ul>
<li>such claims may be treated as deposits under the Banking Act, and the staking service provider may therefore be considered to be engaging in a regulated activity permitted only to licensed banks; and</li>
<li>in the event of the insolvency of the staking service provider, clients are treated as general unsecured creditors; and</li>
</ul>
</li>
<li>if the staking service provider is a licensed bank, the staked crypto assets would be counted as its risk-weighted assets for capital adequacy purposes and, according to the currently prevailing practice of FINMA, be attributed a risk weighting of 800%.</li>
</ul>
<p>Another analysis is to treat staking service providers broadly as fiduciaries/custodians (for ease of reference, we will call this the «fiduciary analysis»), i.e.:</p>
<ul>
<li>they may not be considered to be engaging in an activity permitted only to licensed banks (but may nevertheless become subject to anti-money laundering regulations);</li>
<li>in the event of the insolvency of the staking service provider, the staked crypto assets received from clients do not form part of the insolvency estate;<a href="#_ftn1" name="_ftnref1">[1]</a> and</li>
<li>if the staking service provider is a licensed bank, the staked crypto assets are not included in its risk-weighted assets for capital adequacy purposes (but may be subject to restrictions imposed by FINMA).</li>
</ul>
<h3>C. The Custodian&#8217;s Obligation to Ensure the Crypto Assets&#8217; «Immediate Availability» Remains Key</h3>
<p>The new Guidance&#8217;s approach to determining which of the two analyses is applicable to staking service providers builds on the three tiers of crypto asset custody that were introduced under the DLT Act:</p>
<ul>
<li>(1) If crypto assets are held in custody (i) individually segregated on a client level and (ii) subject to the custodian&#8217;s obligation to ensure their immediate availability, the fiduciary treatment analysis applies.</li>
<li>(2) If crypto assets are held in custody (i) in an omnibus account but with records of each client&#8217;s fractional share and (ii) subject to the custodian&#8217;s obligation to ensure their immediate availability, the fiduciary treatment analysis applies. If the crypto assets so held are payment tokens, this form of custody requires an «Article 1b» license (or fintech license) under the Banking Act.</li>
<li>(3) If crypto assets are held in custody (a) in an omnibus account and with no records of each client&#8217;s fractional share or (b) not subject to the custodian&#8217;s obligation to ensure their immediate availability, the crypto assets are treated as if they were held by the custodian acting as banker (i.e., for its own account).</li>
</ul>
<p>As the key criterion for determining which of the two analyses applies to Swiss staking service providers, the Guidance focuses on the obligation to ensure the immediate availability of the crypto assets and how such an obligation may be affected by different staking arrangements in constellations under which staking involves the possibility of lock-ups or slashing.</p>
<h3>D. What the New Guidance Sets out as Important Criteria</h3>
<h4>1. Direct Staking by Licensed and Unlicensed Staking Service Providers</h4>
<p>For the fiduciary analysis to apply to a Swiss provider of staking services that controls the withdrawal keys, the following conditions must be met according to the new Guidance:</p>
<ul>
<li>the client has provided specific instructions as to the type and number of crypto assets to be staked;</li>
<li>appropriate measures have been taken to ensure that the crypto assets staked to a particular validator address and, after staking, to a particular payout address can be unambiguously attributed to the client;</li>
<li>the client is transparently and clearly informed of all risks;</li>
<li>appropriate steps are taken to mitigate the operational risks of operating a validator node (including business continuity management) to avoid slashing and other penalties; and</li>
<li>a Digital Assets Resolution Package (<strong>DARP</strong>) is prepared to ensure appropriate risk management.</li>
</ul>
<p>For the fiduciary analysis to apply to Swiss non-bank staking service providers engaged in direct staking of payment tokens, the Guidance requires that the staked payment tokens continue to be held in individual custody, with a separate and assignable blockchain address for each client (at the level of the original custody address, the staking address, and the withdrawal address).</p>
<h4>2. Delegation by a Licensed Bank or Securities Firm to a Third-Party Provider of Staking Services</h4>
<p>For the fiduciary analysis to apply with respect to a Swiss bank or securities firm that engages a third-party staking service provider to provide staking services to the institution&#8217;s clients, the following conditions must be met according to the Guidance:</p>
<p>The bank or securities firm must enter into a fiduciary agreement with the client that contains a specific fiduciary mandate from the client, including the selection of crypto assets and the amount. In FINMA&#8217;s view, the bank acquires a contractual claim against the third-party staking service provider for the return of the staked cryptoassets, and the fiduciary agreement is intended to ensure that the fiduciary analysis applies to this contractual claim.<a href="#_ftn2" name="_ftnref2">[2]</a></p>
<p>The fiduciary arrangement must include a comprehensive risk disclosure to the client and adhere to requirements broadly analogous to those set out in the Swiss Bankers Association&#8217;s 2016 Directives on Fiduciary Investments. In particular, the bank or securities firm must</p>
<ul>
<li>limit counterparty risks by selecting an institution subject to prudential supervision with a good credit rating;</li>
<li>ensure, by means of specific due diligence, that the third-party provider itself holds, inter alia, the relevant withdrawal keys; records the validator addresses and has taken all necessary measures to mitigate operational risks associated with the operation of the validator node; and is based in a jurisdiction offering equivalent protection to clients; and</li>
<li>establish a DARP to ensure appropriate risk management.</li>
</ul>
<h3>E. What Regulated Banks Need to Do Now</h3>
<p>In light of the requirements set out under the Guidance, Swiss regulated banks engaging in staking services should consider taking the following steps.</p>
<ul>
<li><strong>Assessment of Third-Party Staking Providers</strong>: In order to ensure compliance with the Guidance, regulated banks offering their clients staking services under which a third-party service provider (staking chain) is appointed to operate the validator node will need to assess whether the appointed third-party staking service provider under their current set-up satisfies the relevant requirements under the Guidance. Pursuant to the Guidance, ultimately only third-party staking service providers which are subject to prudential supervision in Switzerland will be suitable counterparties to which the operation of the validator node can be delegated.</li>
</ul>
<p>To the extent the third-party staking provider is domiciled outside of Switzerland, regulated Swiss banks will need to assess whether the third party is subject to prudential supervision in a jurisdiction with equivalent regulation. In addition, the Guidance requires that the bankruptcy laws in the home jurisdiction of the third-party staking provider provides the same level of legal certainty as in Switzerland in relation to the segregation (or equivalent treatment) of crypto assets in insolvency proceedings. The Guidance does not define which criteria the foreign bankruptcy laws must satisfy in order to be considered sufficient under the Guidance, however, we assume that at a minimum the foreign laws must provide a clear legal basis and/or regulatory guidance regarding the treatment of crypto assets in the bankruptcy of the foreign staking service provider. From the perspective of the Swiss regulated bank, it will likely be challenging to assesses the adequacy of the foreign bankruptcy laws in question. It may, therefore, be advisable for Swiss banks to request the delivery of a legal opinion from their relevant staking providers confirming the treatment of crypto assets under the bankruptcy laws in the relevant jurisdiction.</p>
<ul>
<li><strong>Review of Contractual Arrangements with Third-Party Staking Providers:</strong> Further, the Guidance stipulates a number of requirements which the relevant third-party staking service provider must satisfy from an operational perspective. As outlined above, such operational requirements namely include the holding of the relevant withdrawal keys, the adequate recording of validator addresses and the implementation of adequate measures to mitigate the staking related operational risks. Regulated banks will, in consequence, be required to perform a due diligence in relation to their contractual partners in order to ensure that the appointed third parties are capable of satisfying the requirements defined under the Guidance. In light of the requirements set out under the Guidance, it will be advisable for Swiss regulated banks to update the applicable contractual arrangements to ensure that relevant requirements set out under the Guidance are translated into clear contractual obligations of the relevant staking service providers under the applicable contractual arrangements. Due to the importance of compliance with the Guidance for Swiss regulated banks in view of the considerable risk weighting of crypto assets under the capital requirements, Swiss banks should be requesting that their third-party service providers under the applicable contractual arrangements give relevant representations as to the compliance with the requirements set out under the Guidance.</li>
<li><strong>Review and Update of existing Risk Disclosure: </strong>The Guidance requires that the regulated Swiss banks, in particular engaging in direct staking on behalf of their clients, adequately and transparently inform the clients of the risks inherent to staking. Pursuant to the Guidance, the risk disclosure will at a minimum need to inform the client about the risks related to slashing, potential staking related lock-up periods (including the increased market risks due to the potentially delay in disposing over the staked crypto assets) and the legal uncertainties in the event of bankruptcy. In order to ensure compliance with the Guidance, regulated banks should review their existing risk disclosure in light of these requirements and make the necessary amendments to ensure an adequate disclosure of the relevant risks.</li>
<li><strong>Digital Asset Resolution Package:</strong> The Guidance requires regulated banks engaging in staking activities on behalf of their clients to draw-up a DARP to ensure adequate risk management. FINMA has to date typically required regulated banks and other financial institutions engaging in crypto asset related activities to draw up a DARP which should in effect allow FINMA to efficiently segregate and deliver the relevant crypto assets to the entitled clients in the case of a bankruptcy of the regulated entity. In order to ensure such efficient segregation, the DARP should outline the relevant custody set-up and provide a brief legal analysis outlining the legal basis for the segregation of custody assets in bankruptcy proceedings. In addition, the DARP should include the necessary factual information to allow an efficient segregation from an operational perspective. The DARP should, therefore, include the details of the relevant employees with access to the private keys, and in case of staking the respective withdrawal keys, and all relevant information on third party custodians.</li>
</ul>
<p style="padding-left: 40px;">Pursuant to the Guidance and in the context of staking activities by Swiss regulated banks, the DARP will need to adequately describe the staking set-up employed by the relevant bank and ensure that, to the extent a third party has been appointed as the relevant node validator, the DARP includes the necessary information for FINMA to gain access to the withdrawal keys. In order to ensure compliance with the Guidance, Swiss banks will need to draw up a staking specific DARP or update their existing DARP to ensure that the relevant staking activities are adequately covered by the DARP.</p>
<p>The Guidance does not define a specific date until which Swiss regulated banks must ensure compliance and does not provide for applicable transitional periods. In consequence, the Guidance and the requirements set out thereunder will be immediately effective. To the extent necessary, Swiss banks should, therefore, promptly take the steps outlined above, to ensure that the staked crypto assets are not included in its risk-weighted assets for capital adequacy purposes as of the relevant dates for measuring and disclosing the capital adequacy.</p>
<h5><a href="#_ftnref1" name="_ftn1">[1]</a> If the staking service provider is a licensed bank, such assets will qualify as custody assets within the meaning of art. 16(1<sup>bis</sup>) Banking Act. If the staking service provider is not a licensed financial institution, this follows from a corresponding provision in the Debt Enforcement and Bankruptcy Act (art. 242a). Both provisions have been inserted as part of the DLT Act.</h5>
<h5><a href="#_ftnref2" name="_ftn2">[2]</a> The fiduciary analysis of the claim against the third-party staking service provider is in line with the older art. 16(2) Banking Act, not the new art. 16(1bis), which the Guidance highlights.</h5>


20231221_Cryptho-Ether_KRS_Firefly_Preview_1000x1000

FINMA Issues Guidance on Staking Services

Financing and Investment Products

HSBC_webnews

Homburger News

Share-Image Teamplate Deals-and-Cases

<p>Homburger acted as counsel to a syndicate of international financial institutions led by HSBC Bank plc in connection with certain financing aspects of Prax Group&#8217;s acquisition of OIL! Tankstellen GmbH. Headquartered in London, United Kingdom, Prax Group is a global energy company selling fuel and non-fuel convenience products and services. In December 2023, Prax Group acquired OIL! Tankstellen GmbH, which has been operating a continuously growing network of filling stations in Germany, Austria, Switzerland and Denmark since 1994.</p>
<p>Homburger advised the lenders in this financing with regard to all Swiss legal aspects.</p>
<p>The Homburger team was led by Daniel Haeberli (Financing) and included Fabrice Eckert (Financing), Simone Gloor (Financing) and Stefan Oesterhelt (Tax).</p>


Homburger advised the lenders led by HSBC Bank plc in connection with the financing of Prax Group's acquisition of OIL! Tankstellen GmbH

Corporate / M&A

Regulatory

Competition

Woehrle-web-640x140

<p>On November 30, 2023, Wöhrle Group, headquartered in Wildberg, Germany, has announced that it had acquired Oskar Rüegg Holding AG, headquartered in Jona, Switzerland, and its subsidiaries (Switzerland / Bulgaria / Mexico).</p>
<p>Both companies specialize in the manufacture of sophisticated stamped parts and assemblies and are established players in the industry. Both companies together have revenue of around EUR 100 m in the automotive and other industries.</p>
<p>Homburger advised the Wöhrle Group on this transaction. The Homburger team was led by Daniel Häusermann and included Claudine Schär and Erik Habich (all Corporate / M&amp;A), Reto Heuberger, Peter Müller and Philippe Weber (all Tax), Stefan Kramer and Fabrice Eckert (both Banking / Finance) as well as Jonas Krull (Regulatory / Competition).</p>


Homburger advised Wöhrle Group on its acquisition of Oskar Rüegg Group

JPW-web-640x140

Homburger Deal News JPW Industries Holding Corporation Nov 23

<p>Homburger acted as counsel to JPW Industries Holding Corporation in connection with the refinancing of its 9.000% senior secured notes due 2024 by entering into a new term loan and security agreement with Apollo Administrative Agency, LLC as administrative agent and the lenders party thereto.</p>
<p>Headquartered in La Vergne, Tennessee, USA, JPW Industries Holding Corporation is a global machinery and industrial equipment manufacturer.</p>
<p>Homburger advised JPW Industries Holding Corporation with regard to all Swiss legal aspects of the financing transactions.</p>
<p>The Homburger team was led by Daniel Haeberli (Financing) and included Fabrice Eckert (Financing), Simone Gloor (Financing), Norina Tröhler (Financing) and Stefan Oesterhelt (Tax).</p>


Fabrice
Eckert

Homburger advised the lenders led by HSBC Bank plc in connection with the financing of Prax Group's acquisition of OIL! Tankstellen GmbH

Homburger advised Wöhrle Group on its acquisition of Oskar Rüegg Group

Homburger advised JPW Industries Holding Corporation in connection with a notes refinancing

Swiss Federal Council publishes Report on Banking Stability

Neue Regeln für Versicherer zum Umgang mit naturbezogenen Finanzrisiken

FINMA Issues Guidance on Staking Services

Decentralised Finance

Kommentierung von Art. 7 FIDLEG

10 Fragen und Antworten zum FIDLEG

Join the Team

Fabrice Eckert

Career

Languages

Bar Registration

Teams

FabriceEckert

Homburger advised the lenders led by HSBC Bank plc in connection with the financing of Prax Group's acquisition of OIL! Tankstellen GmbH

Homburger advised Wöhrle Group on its acquisition of Oskar Rüegg Group

Homburger advised JPW Industries Holding Corporation in connection with a notes refinancing

Swiss Federal Council publishes Report on Banking Stability

Neue Regeln für Versicherer zum Umgang mit naturbezogenen Finanzrisiken

FINMA Issues Guidance on Staking Services

Decentralised Finance

Kommentierung von Art. 7 FIDLEG

10 Fragen und Antworten zum FIDLEG

Join the Team

Fabrice Eckert

Career

Languages

Bar Registration

Teams

Fabrice
Eckert