Switzerland’s Financial Market Supervisory Authority (Finma) has rolled out what it said is a ‘less complex’ regulatory regime for small banks, which will also include changes to the risk-oriented focus of regulatory audits they undergo.

The new plans will be initially implemented as part of a pilot project.

Participating institutions must have high levels of capital and liquidity, Finma explained, and in return, they will be subject to a ‘substantially less complex’ regulatory regime.

“Institutions participating in the regime enjoy significantly reduced requirements. They do not, for example, have to calculate a range of key regulatory figures e.g. risk-weighted assets and the net stable funding ratio, and disclosure requirements are reduced to a minimum.”

“Further simplifications will apply to the qualitative requirements for operational risks, outsourcing and corporate governance. The regime does not, however, contain any relaxation of business conduct rules.”

There will also be fewer but ‘more intensive’ regulatory audits.

“Small institutions without observable increased risks will also have the opportunity to request two or three yearly audits instead of the current annual audits. To make the audits more meaningful, it will also be possible to take random samples on a risk-oriented basis instead of comprehensively,” the watchdog explained.