Category Archives: FinSA (FIDLEG)

Update on Client Adviser Registry and Ombudman’s Offices under the Financial Services Act

On 1 January 2020, the new Financial Services Act entered into effect. Certain of the transition periods are linked to the licensing of new institutions that perform relevant roles under the Financial Services Act. This article provides for an update on the current status and the end of the transition period.

By Benjamin Leisinger (Reference: CapLaw-2020-39)

Licensing of the Reviewing Bodies pursuant to the Financial Services Act – An Initial View

The Swiss financial market regulatory framework has undergone fundamental and comprehensive reforms over the past few years. The main purpose of these reforms is to harmonize Swiss regulations with existing and new EU regulations and to ensure access of Swiss financial institutions to the European market by fulfilling equivalence requirements. The most important parts of the reform package in terms of Swiss capital markets are set out in the new Financial Services Act (FinSA) and its implementing ordinance, the Financial Services Ordinance (FinSO), both of which entered into force on 1 January 2020 (subject to the phase-in of certain provisions as well as transition periods). 

By Philippe Weber / Christina Del Vecchio (Reference: CapLaw-2020-21)

Structured products under FinSA

The entry in force of FinSA and the FinSO has introduced several changes to the regulation of structured products in Switzerland. Some changes appear directly in the specific rules on structured products, but most of them derive from their inclusion in the FinSA’s general framework. This article presents the new regulation of structured products as of 2020 and discusses a select handful of specific issues. 

By Jeremy Bacharach1 (Reference: CapLaw-2020-22)

The New Swiss Prospectus Regime

In June 2018 the Swiss Federal Parliament passed the Financial Services Act and the Financial Institutions Act, and on 6 November 2019 the Swiss Federal Council published the implementing ordinances thereto. The acts and the related ordinances will become effective on 1 January 2020. Modeled largely after the EU prospectus framework, the new prospectus regime marks a veritable paradigm change to Swiss capital market regulation, introducing a number of novelties for issuers of securities in the Swiss market, such as the requirement for an ex ante approval for most financial instruments, coupled with some important long-awaited explicit exemptions from such requirement and the requirement for a prospectus for secondary public offerings.

By Christian Rehm / René Bösch (Reference: CapLaw-2019-51)

Countdown at the Point of Sale – Final Version of Financial Services Ordinance Published

On the way to the new Financial Services Act (FinSA), the final version of the Financial Services Ordinance (FinSO), which was published on 6 November 2019, started the final countdown towards the implementation of these new regulations in the light of their entry into force on 1 January 2020. As of that date, financial services providers must, in principle, comply with the new regulations (including the key adjustments made in the final version of the FinSO). However, various transitory provisions provide for (temporary) relief from the apparent time pressure.

By Sandro Abegglen / Luca Bianchi (Reference: CapLaw-2019-52)

The Basic Information Sheet – No surprises in the final implementing ordinances, but some relevant amendments

On 1 January 2020 the new Swiss Financial Services Act (FinSA) and its implementing ordinance, the Financial Services Ordinance (FinSO), will come into effect. The Swiss Federal Council announced its decision on the entering into force of the new financial services regulation and the final text of the implementing ordinances on 6 November 2019. There are no big surprises in the final ordinances regarding the newly introduced basic information sheet (Basisinformationsblatt). However, a number of amendments were made based on responses in the consultation process of the draft ordinances.

By Daniel Haeberli (Reference: CapLaw-2019-53)

Update: The Enforcement of Clients’ Rights in the Financial Services Act

The Financial Services Act (FinSA) as it will enter into force on 1 January 2020 contains two elements of an initially broad set of proposals meant to strengthen the enforcement of clients’ rights. First, it specifies the scope of records to be kept regarding a service provider’s relationship with a client and gives the client an unambiguous legal basis to obtain a copy of such records on request. Second, it will require all providers of financial services to be affiliated with an ombuds institution. Parliament ultimately opposed the introduction of new procedural mechanisms such as collective action instruments and changes to the ‘loser pays’ rule, referring to ongoing efforts towards a broader reform of the Civil Procedure Code.

By Thomas Werlen / Jonas Hertner (Reference: CapLaw-2019-54)

The New Registration Duty for Client Advisers – An Update on the Final FinSO

On 6 November 2019, the Federal Council decided that the Financial Services Act (FinSA) would enter into force on 1 January 2020. Subject to a transition regime, the FinSA will introduce a new registration duty for client advisers of Swiss financial service providers not subject to prudential regulation and client advisers of foreign financial institutions. Today, no such registration requirement exists with the exception of similar obligations for untied insurance intermediaries, who have to register with the public register kept by the Swiss Financial Market Supervisory Authority (FINMA).

Under the new regime, client advisers will be required to register in a register maintained by one or more registration bodies licensed by FINMA. To register, they must evidence sufficient knowledge of the rules of conduct under the FinSA and the necessary expertise to perform their duties, adequate financial means as well as affiliate themselves with an ombudsman’s office. Clients may check the register at any time to verify that their adviser has the required qualifications. The registration will, however, not imply any prudential or ongoing supervision by FINMA. If a client adviser no longer meets the registration requirements, the adviser will be deleted from the register by the competent registration body and may, consequently, no longer engage in activities as a client adviser.

By Martin Peyer (Reference: CapLaw-2019-55)

Funds Distribution under the new financial market law architecture

On 1 January 2020, the new Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) will enter into force. This entails various changes of existing regulatory concepts in the context of distribution and management of collective investment schemes. From today’s CISA perspective, the term “distribution” under Art. 3 CISA plays a fundamental role. Under the new regulatory regime, an exclusive focus on the new concept of the offer falls short in explaining the rules governing the distribution of funds. Particularly with regard to the behavior at the point of sale, the concept of financial services is of primary importance. 

By Diana Imbach Haumüller / François Rayroux (Reference: CapLaw-2019-56)

Note from the Editors

The new Swiss Financial Services Act (FinSA) and Financial Institutions Act (FinIA) were enacted by the Swiss Parliament in June 2018, and are currently expected to enter into effect on 1 January 2020. While the FinSA introduces uniform prospectus rules generally applicable to all offerings of securities in Switzerland and comprehensive rules of conduct for providers rendering financial services in Switzerland, the FinIA introduces the prudential supervision of all financial services providers operating a portfolio or asset management business in Switzerland and uniform licensing requirements for financial intermediaries other than banks and insurance companies. With drafts of the implementing ordinances to the FinSA and FinIA having just been published, we deem it the right time to provide you with an update on this new legislation and a first assessment of the draft implementing provisions.

The editors.