Swiss DLT Act takes next hurdle

Blockchain proposal adopted unanimously by Committee

The DLT environment heaves a deep sigh of relief. Contrary to all fears, the enactment of the Federal Act on the Adaptation of Federal Law to Developments in the Technology of Distributed Ledgers, shortly titled DLT Act*, does not appear to be delayed due to the corona crisis. As the Economic Affairs and Taxation Committee (EATC) of the National Council announced in its press release of 13 May 2020), it unanimously accepted the corresponding proposal of the Federal Council in the final vote with only minor changes.

The Committee emphasised that it was very important for Swiss start-ups, particularly in view of the current economic crisis, to increase legal certainty in the area of DLT applications.

Changes to the Federal Council's proposal

The two most important changes to the Federal Council's proposal concern data access and ombudsman offices.

1. Access to data: The Committee unanimously adopted a proposal for a new provision in the Federal Act on Debt Enforcement and Bankruptcy (DEBA), according to which any third party who can prove a legal or contractual entitlement to the data can demand not only access to the data, but also its issuance (Art. 242b DEBA). This amendment takes into account the concerns of the initiative of Marcel Dobler (National Councillor FDP St. Gallen).

2. Ombudsman Offices: The Committee decided by 18 votes to 5 to amend the Financial Services Act (FinSA) in such a way that financial service providers who provide financial services exclusively to institutional or professional clients do not have to join an ombudsman's office (Art. 77 FinSA). The majority of the Committee is of the opinion that this would considerably reduce the administrative burden on small DLT trading systems.

On the other hand, a motion to demand additional disclosures in the interest of consumer protection of DLT trading systems did not find a majority because the aspect was already sufficiently regulated under private law in the Commission's view.

Treatment already in summer session 2020

The National Council, as the first chamber of parliament, is expected to deal with the bill in the 2020 summer session. Parallel to this, the preparation of the necessary ordinances is already running in the background. The DLT Act is expected to be enacted in 2021.

Assessment MME

The priority treatment of the blockchain proposal even in times of crisis, the unanimous adoption and the underlining of the importance of the proposal are particularly strong signals that, in addition to the Federal Council, the legislator is also aware of the great potential of block-chain and DLT and it can be expected that Switzerland will maintain its pioneering position in this promising area.

Both, the extension of access to data proposed by the Committee and the exemption from the obligation to connect to an ombudsman’s office for certain financial service providers are very welcome. As a result, data subjects will be able to exercise their rights more effectively and administrative burdens can be avoided where they are unnecessary, namely regarding institutional or professional clients.

* The DLT Act is intended to improve the legal framework for the technology of distributed ledgers (DLT)

May 2020 | Authors: Andreas Glarner, Romedi Ganzoni

Your team

Contact

In need of legal, tax or compliance advice? We look forward to contacting you.