ZURICH (Reuters) - Swiss financial regulator FINMA is planning to loosen anti-money laundering rules for smaller financial technology firms, part of a drive to boost innovation and shore up the country’s position as a leading money management hub.

FILE PHOTO: The logo of Swiss Financial Market Supervisory Authority FINMA is seen outside their headquarters in Bern, Switzerland April 5, 2016. REUTERS/Ruben Sprich/File Photo

The revisions, prompted by a new ‘fintech’ licensing category carved out by the Swiss parliament in June, will clarify how non-banks applying for the new license must ensure due diligence.

“As a rule, all financial institutions are subject to similar due-diligence requirements relating to combating money laundering. However, as most fintech license applicants are likely to be smaller institutions, FINMA proposes to introduce some organizational relaxations for such institutions,” the financial supervisor said in a statement on Tuesday.

Its proposal defines small institutions as those with gross revenues under 1.5 million Swiss francs ($1.5 million).

Under its terms small institutions, unlike banks, will not for instance have to establish an independent anti-money laundering unit with monitoring duties, it said.

The move comes after Switzerland’s parliament voted in June to amend the Swiss Banking Act, creating a new fintech license category to ease rules imposed on financial endeavors that take in funds and provide certain bank-like functions, but do not make money by investing or receiving interest on the funds.

Switzerland, the world's largest center for offshore wealth, has gained prominence in recent years as a hub for financial technology providers, such as banking software groups Temenos TEMN.S and Avaloq AVLN.S, as well as cryptocurrency projects.

But advocates have warned that as banks face increasing margin pressure and tougher competition from technological rivals, more must be done to promote innovation if Switzerland is to remain a leading financial hub.

The new license, intended to promote financial innovation, will apply to groups which accept public deposits of up to 100 million francs but don’t invest the funds or pay interest.

It will likely have the biggest immediate impact on activities such as crowdfunding, which under current rules could often require a banking license.

Cryptocurrency projects -- which often fall under anti-money laundering or securities regulations under FINMA’s current guidelines but generally don’t require a banking license -- are unlikely to be affected by the changes.

The federal government plans the amendments to take effect from Jan. 1, and FINMA said its own adjustments to the Anti-Money Laundering Ordinance should enter into force simultaneously, if possible.

FINMA opened a review period for its proposal on Tuesday to run through October 26.

($1 = 0.9957 Swiss francs)