Category Archives: FinIA (FINIG)

Something old, something new and some things change – FinIA Update

After a long wait in the Committee on Economic Affairs and Taxation, the Council of States, the upper chamber of the Swiss parliament, approved in its 2016 winter session the bill for a Federal Act on Financial Institutions (FinIA) as well as amendments of other statutes, such as the Federal Act on Banks and Saving Banks of 8 November 1934 and the Federal Act on the Swiss Financial Market Supervisory Authority of 22 June 2007. This approval allows this bill to move forward to the National Council, the lower chamber of the Swiss parliament.

Overall, the bill on the FinIA and its schedules, as approved by the Council of States, remains close to the draft bill presented by the Federal Council (see CapLaw-2016-7). Most changes seek to clarify the project rather than challenge fundamentally the initial proposal. Two exceptions deserve, however, further attention: first, the Council of States refused to create a framework for a new supervisory authority solely responsible for supervising portfolio managers. Instead, it opted to draw a line between day-to-day supervision, which is due to be entrusted to a new supervisory authority, who in turn can rely on the work of audit firms or carry out their own reviews, and more supervisory actions such as licensing and enforcement action, which will remain with FINMA.

By Rashid Bahar (Reference: CapLaw-2017-06)

Supervision of Portfolio Managers and Trustees – Update

Under current Swiss law, portfolio managers, unless they are acting as asset managers for collective investment schemes, and trustees are not subject to a comprehensive prudential supervision, a situation that will change under the proposed new Financial Institutions Act (“FinIA”). On 14 December 2016, this proposed new act took the first parliamentary hurdle when the Swiss Council of States deliberated and passed the new act. Compared to the draft bill published by the Swiss government in November 2015 (see CapLaw 2016-8), the draft FinIA now passed by the Swiss Council of States includes a number of significant changes to the new supervisory framework applicable to portfolio managers and trustees. Most notably, portfolio managers and trustees will have to apply for a license with the Swiss Financial Market Supervisory Authority (FINMA), while the ongoing (day-to-day) prudential supervision of these financial institutions will fall within the responsibility of new private supervisory organizations.

By Patrick Schleiffer / Patrick Schärli (Reference: CapLaw-2017-07)

Something Old, Something New: The Supervision of Financial Intermediaries under the Draft Federal Act on Financial Institutions

On 4 November 2015, the Federal Council published a Bill to parliament for a Financial Services Act (FinSA) and a Financial Institutions Act (FinIA). As expected, the FinIA proposes to revise the regulatory architecture for financial institutions. Instead of the current sectorial approach, the FinIA proposes to introduce a regulatory pyramid with a light regulatory framework for asset manager and trustees, and an increasingly more stringent regime for collective asset, securities houses and, at the top, banks.

By Rashid Bahar (Reference: CapLaw-2016-7)

Supervision of Portfolio Managers and Trustees

Under current Swiss law, portfolio managers, which are not acting as asset managers for collective investment schemes, and trustees are not subject to a comprehensive prudential supervision. Portfolio managers and trustees are only required to register with a self-regulatory organization in order to comply with Swiss anti-money laundering laws. Other financial services providers, most notably banks, have criticized this lack of regulatory oversight. Furthermore, the current Swiss regulatory framework for portfolio managers is not in line with international regulatory standards, such as the EU/EEA’s Markets in Financial Instruments Directive (MiFID). This situation is about to significantly change under the proposed new Financial Institutions Act (FinIA). This new act will subject the approximately 2,300 portfolio managers to authorization requirements and comprehensive supervision by a FINMA-approved supervisory organization.

By Patrick Schleiffer / Patrick Schärli (Reference: CapLaw-2016-8)