L I E C H T E N S T E I N ’ S N O N - B A N K F I N A N C I A L S E C T O R Financial Stability Report 2021
total number of business relationships over the last few years, the relatively stable number of fiduciary and fiduciary companies is somewhat surprising. This development suggests that the business environment is changing structurally. While the business environment may have become more compe titive, the increase in regulatory requirements is associated with extra effort – and thus revenues – from existing client relationships, i.e. the fiduciary sector may have become more specialized in recent years. In this context, the well-developed financial center in Liechtenstein – including banks, insurances, investment funds, asset management com panies and the fiduciary sector – may enjoy a competitive advantage in certain areas due to its “one-stop-shop” approach, particularly in the area of wealth structuring. Although a recent revision of the Professional Trustees Act ( TrHG ) has extended the FMA’s super visory responsibilities in the fiduciary sector, data availability remains an open issue. While the fiduciary sector remains largely self-regulated, with the Liechtenstein Institute of Professional Trustees and Fiduciaries ( T HK ) supervising the duties of the trustees, the new legal provisions – which entered into force in mid-2020 – indeed imply a significant extension of the FMA’s responsibilities and aim at facilitating the prevention of abuse and fraud.17 In this context, governance was a key focus of the revision, and the new law also aims at ensuring the solvency of trustees and trust companies by including a legal obligation of maintaining sufficient financial means. Thereby, the law also includes a mandatory observation of determined principles of accounting according to the Liechtenstein company law ( PGR )
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as well as mandatory external audits. While the respective audit reports have to be submitted to the FMA on an annual basis, the legal revision does not introduce a reporting system for fiduciary companies with regard to prudential indicators, with data availability in the fiduciary sector remaining an open issue even after the submission of audit reports to the FMA in 2023.
Token economy On 1 January 2020, the new legislation on service providers for Tokens and Trusted Technologies entered into force ( T VTG ). The new law aims at defining a legal framework for all applications of the token economy in order to ensure legal certainty for new business models. As a major difference to legal approaches in other countries, the FMA registers service providers such as token generators or people who verify the legal capacity and the requirements for the disposal of a token. Besides the registration process, supervision activities based on the TVTG are mostly limited to anti-money laundering. Importantly, the TVTG is applicable in parallel to classic financial market regulation. Both the number of entities as well as the quantity of services applying for registration has picked up substantially since last year. The TVTG includes a grandfathering period to persons that already carried out an activity that is regulated under the new law. Those service providers could continue to offer their services without registration until the end of the year
For a more detailed explanation regarding the legal revisions, please also see Box 7 in last year’s Financial Stability Report.
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