The Liechtenstein Financial Market Authority's annual report, which appears each April, is now available on the regulator's website in English.

Nestled between Austria and Switzerland, the tiny principality has a diversified financial sector and is part of the European Economic Area. In September 2016, the European Union's Alternative Investment Fund Managers' Directive was incorporated into the EEA Agreement which Liechtenstein has signed. Since the beginning of October, Liechtenstein alternative investment fund managers (AIFMs) and alternative investment funds (AIFs) have thus been in possession of EU passports, allowing them to distribute funds throughout Europe. The FMA reports that the old Investment Undertakings Act 2005 (Investmentunternehmensgesetz, IUG) has lapsed and the new Investment Undertakings Act (IUG 2015) has come into force. This has started off a one-year transitional period during which all investment undertakings under the IUG 2005 have to be converted into either AIFs, undertakings for collective investment in transferable securities (UCITS), or investment undertakings under the IUG 2015. If the conversion period expires without being used, the investment undertaking will cease to exist on 1 October 2017.

The number of professional trustee licences grew from 115 at the end of 2015 to 139 at the end of 2016. This increase was due to the elimination of dormant professional trustee licences on 1 January 2017. The deadline for activating them expired the previous day. By the end of 2016, the FMA had received 37 activation applications and three declarations of renunciation. A total of 79 dormant professional trustee licences expired due to non-activation.

After the tightening up of capital requirements and governance provisions by the new Banking Act (Banken-gesetz, BankG) (CRD IV package) at the beginning of 2016, the Recovery and Resolution Act (Sanierungs- und Abwicklungsgesetz; SAG) entered into force at the beginning of 2017. Both sets of legislation are attempts to solve the too-big-to-fail problem and to make the financial sector more stable. The FMA must now prepare resolution plans for every institution it regulates and keep them up-to-date. The powers of the Court of Justice relating to bankruptcy have thus been transferred to it.

In autumn 2017, amendments to the Due Diligence Act (Sorgfaltspflichtgesetz, SPG) will tighten rules that combat money laundering and terrorist financing. Introduction of risk-based due diligence supervision will have a significant impact on the FMA’s work in practice. Based on the international requirements, the sanctioning powers of the FMA will also be expanded considerably.

In its capacity as an audit supervisory authority, the FMA represents Liechtenstein in the International Forum of Independent Audit Regulators (IFIAR). According to the annual report, the FMA has now signed the multilateral memorandum of understanding (MMoU) among IFIAR members.

Prof Roland Müller took over the chairmanship of the board of directors at the beginning of 2017. His term of office runs through the end of 2019, with the option of re-election until the end of 2021.

For the year 2017, the board of directors approved six additional positions - some to deal with new responsibilities in the supervision of banks, markets and auditors, and to carry out the newly assigned function of a resolution (bankruptcy management) authority, some to meet new demands posed by a tightening of standards to combat money laundering and terrorist finance. It has also taken on the job of regulating casinos for 'due diligence.' The regulator aims to recruit staff elsewhere in its ranks in 2017, promising that "personnel marketing will be strengthened." Although the regulator's plethora of jobs is expanding, the Government's contribution to its coffers is remaining static this year.

The first FinTech companies have established themselves in Liechtenstein and the FMA wants to be able to adjust the minimum capital of banks and investment firms in a way that lowers the barriers to entry to financial markets for FinTech companies. Just this month Raiffeisen Privatbank Liechtenstein became the principality's first private bank to be accepted by Privatbankchecker, an online platform where affluent investors can search, compare and contact the best banks. The platform provides HNWs with an overview and comparison of investment-specialised financial institutes. After answering a few questions, they receive proposals for investment opportunities. Privatbankchecker selects the banks on the platform according to 170 criteria.