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29 November 2019
The Federal Council recently decided to put the Swiss Financial Services Act (FinSA) and the Swiss Financial Institutions Act (FinIA) into effect on 1 January 2020 as the last part of the financial market regulations reform project. Concurrently, the Federal Council published the final versions of the implementing ordinances with some amendments compared with the previous draft versions published during the public consultation period. The Swiss Financial Market Supervisory Authority (FINMA) is expected to publish the first draft of the additional implementing provisions by the end of 2019 and a final version by the end of the first quarter of 2020.
The legislature took a decision to profoundly overhaul Swiss financial market regulations (ie, the organisation of the financial market supervisory authority, the financial market infrastructure regulations, the financial service regulations at the point of sale and the regulations on financial institutions) by transforming their primarily product-oriented statutes into cross-section legalisation. The final part of this decision will come into force on 1 January 2020 with the introduction of the FinSA and the FinIA.
FinSA will create a uniform competitive environment for financial intermediaries at the point of sale and increase client protection. It will introduce code of conduct requirements that financial service providers must comply with at the point of sale. Further, FinSA will establish provisions for prospectus duties and require a clear and understandable key information document for financial instruments. Conversely, the FinIA standardises the rules for financial service providers that manage third-party assets, in particular:
In addition to introducing two new laws, the Federal Council published the final versions of the Financial Services Ordinance (FinSO), the Financial Institutions Ordinance (FinIO) and the Supervisory Organisation Ordinance (SOO).
The FinSO stipulates the advice and information that financial service providers must provide (and provisions on their organisation) and establishes a new register for client advisers, client documentation and ombudsman services. Moreover, the FinSO contains implementing provisions concerning the prospectus and key information documents, which should make it easier for clients to compare different financial instruments.
The FinIO governs the licensing requirements and obligations for financial institutions (other than banks) and their supervision. The managers of individual assets and trustees are now subject to prudential supervision and less stringent requirements than those for managers of collective investment schemes, fund management companies and securities dealers (now referred to as securities firms).
Further, the SOO fleshes out the licensing requirements and activities for the newly introduced supervisory organisations that will supervise (external) investment managers and trustees together with FINMA.
On 9 September 2019 the Federal Department of Finance pre-published a list of key amendments to the draft FinSO, FinIO and SOO. A more comprehensive analysis of the now-published final ordinance texts reveals the Federal Council's amendments, based in particular on the results of the public consultation:
The Federal Council will closely monitor developments in the European Union following the introduction of the EU growth prospectus and swiftly propose adjustments to the FinIO if necessary to prevent competitive disadvantages for small and medium-sized entities.
FINMA is expected to publish the draft versions of its implementing ordinances and circulars before the end of 2019 and the final version in the first quarter of 2020. This will not be a problem as there is a two year transitory period for most of the new duties.
For further information on this topic please contact Alexander Vogel or Reto Luthiger Meyerlustenberger Lachenal by telephone (+41 44 396 91 91) or email (firstname.lastname@example.org or email@example.com). The Meyerlustenberger Lachenal website can be accessed at www.mll-legal.com.
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