Financial Crime World

Swiss Financial Services Act (FinSA) and Financial Institutions Act (FinIA): Key Changes

The Swiss Financial Services Act (FinSA) and Financial Institutions Act (FinIA) have introduced significant changes to the regulatory framework for financial institutions and their activities in Switzerland. The key changes include:

Definition of Qualified Investor

  • Alignment with Professional Investors: The definition of a “qualified investor” under the revised Collective Investment Schemes Act (CISA) now broadly aligns with the category of professional investors under FinSA.
  • Impact on Financial Services: This change will have implications for financial services, including pre-marketing and regulatory provisions.

Pre-Marketing

  • Admissibility Prior to Appointing Representative and Paying Agent: Pre-marketing is now admissible prior to appointing a Swiss representative and paying agent.
  • FINSA Rules Still Apply: The FINSA rules applicable to marketing still apply, ensuring consistency and transparency in financial services.

Regulation of Various Financial Institutions

  • Consolidation of Regulatory Provisions: The regulatory provisions applicable to licensing and running financial institutions have been consolidated in FinIA.
  • Examples of Requirements: Examples of requirements include effective management of the institution in Switzerland and conditions on delegations of limited tasks to third parties.

Portfolio Managers

  • Definition and Authorisation: Portfolio managers are defined to include all persons mandated to manage assets on a commercial basis in the name of and on behalf of the client.
  • FINMA Authorisation Required: They must apply to FINMA for their authorisation, and once it is granted, ongoing supervision takes place at the lower level by a new form of supervisory authority.

Asset Managers of Collective Assets

  • Authorisation from FINMA: Swiss asset managers of collective investment schemes need to obtain an authorisation from FINMA.
  • Ongoing Supervision: They will continue to be subject to supervision for as long as they carry out the activity in Switzerland.

Fund Management Companies

  • Granting of Authorisation and Prudential Supervision: Granting of the authorisation and prudential supervision remains entirely FINMA’s responsibility.
  • Importance of Effective Supervision: This ensures that fund management companies operate in a safe and secure environment.

Securities Firms

  • Material Conditions for Licensing: The material conditions for licensing have not undergone any material changes.
  • Continued Relevance: Securities firms must still comply with these conditions to maintain their license.

Transitional Regime and Timescales

  • Two-Year Transitional Period: A transitional period of two years is introduced for financial service providers to implement the FinSA conduct and organisational rules, including the new client segmentation rules.
  • Importance of Compliance: This allows them to adapt to the changes and ensure compliance with the new regulations.