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)

In June 2018 the Swiss Federal Parliament passed the Financial Services Act and the Financial Institutions Act, and on 23 October 2018 the Swiss Federal Council presented the ordinances implementing these acts for public consultation until early February 2019. It is expected that the acts and its 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-2018-56)

The Financial Services Act establishes a new prospectus regime in Switzerland requiring the publication of a prospectus for public offerings of securities and the admission to trading on a trading venue. It introduces a new regulatory body – the reviewing body (Prüfstelle) – to be authorized by FINMA and responsible for review and approval of prospectuses. This article discusses the setup and operation of such reviewing body, the prospectus requirements and content as well as the review and approval of the prospectus.

By Sabir Sheikh / Peter Probst (Reference: CapLaw-2018-57)

The publication for consultation of the draft Financial Services Ordinance represents the last milestone on the road to the new financial services architecture in Switzerland. For all those who aim to optimize the details of the point of sale code of conduct, the consultation to the Draft-FinSO until 6 February 2019 is the last possibility to do so. Considering whether to provide comments to the Draft-FinSO is important because the ordinance specifies a number of key provisions of the FinSA on the point of sale duties. Hereinafter, is an overview of the most important proposed ordinance rules.

By Sandro Abegglen / Luca Bianchi (Reference: CapLaw-2018-58)

On 15 June 2018, the Swiss parliament adopted the Financial Services Act and the Financial Institutions Act, which are expected to enter into force on 1 January 2020. One of the key changes introduced by the Swiss Financial Services Act is the obligation to prepare and make available to retail investors a short document setting out the key information, the so-called key information document (Basisinformationsblatt). The draft implementing ordinances the Federal Council has published on 24 October 2018 contains supplementary provisions on the content, language, layout and scope of the new regulatory leaflet. While the proposed template for the future key information document is almost identical to the EU PRIIPs KID template, the Swiss version of the key information document is far more flexible than its EU equivalent and reflects the pragmatic approach taken by the Federal Council in the draft ordinances to ensure a successful implementation of the new regulatory leaflet.

By Daniel Haeberli (Reference: CapLaw-2018-59)

The new Financial Services Act will require all providers of financial services to be affiliated with an ombuds institution. This requirement is the only substantially new element remaining from a broad set of proposals to strengthen the enforcement of clients’ rights. Parliament ultimately opposed the introduction of new procedural mechanisms specifically for the financial services industry, such as collective action instruments and changes to the ‘loser pays’ rule.

By Thomas Werlen / Jonas Hertner (Reference: CapLaw-2018-60)

The Financial Services Act (FinSA), which is expected to enter into force on 1 January 2020, 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 to 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-2018-61)

The following article deals with the differences between the rules of conduct under MiFID II and FinSA. In the first part, the initial situation is described. Subsequently, the individual differences are discussed in more detail. The main differences in regulation can be found in the areas of client segmentation, definition of the service types, appropriateness and suitability test and dealing with retrocessions.

By Peter Sester / Dario Sutter (Reference: CapLaw-2018-62)

The introduction of the concept of an “offer” according to Art. 3 let. g FinSA as a replacement of the current notion of a “distribution” pursuant to Art. 3 CISA will lead to a number of consequences for the Swiss financial industry as well as for foreign financial services providers acting on a cross-border basis into Switzerland. The new concept is more flexible as the current notion of a “distribution”, but also raises a number of delicate questions which need to be clarified. The object of this article is to provide a first analysis of the salient features and challenges of the current and future regimes and their practical consequences with a specific focus on the placement of collective investment schemes in Switzerland.

By Diana Imbach / François Rayroux (Reference: CapLaw-2018-64)