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Switzerland Overhauls Banking Regulations: A New Era for Financial Market Legislation
In a significant move aimed at enhancing financial market stability and investor protection, Switzerland has overhauled its banking regulations. The new financial market legislation architecture, comprising several key acts and ordinances, came into effect on January 1, 2020.
Key Changes
- Financial Services Act (FinSA): Brings investor protection in Switzerland up to date by focusing on investors taking responsibility for themselves.
- Stricter regulation of asset managers and trustees
- Enhanced conduct rules for investment advice
- Extended prospectus requirements
- Financial Institutions Act (FinIA): Brought independent portfolio managers under prudential supervision, with a dedicated supervisory authority.
- Introduced provisions on the authorisation conditions, duties, and supervision of financial institutions
Industry Input
The Swiss Bankers Association was heavily involved in the legislative process, providing extensive input and opinions on the drafts. In a statement, the association highlighted several key points and achievements from the banking sector’s perspective, including:
- Investor protection being brought up to date through increased transparency
- Removal of special legislation governing civil proceedings against financial service providers
- Absence of offences involving negligence
Ordinances
The Financial Services Ordinance (FinSO), Financial Institutions Ordinance (FinIO), and Supervisory Organisations Ordinance (SOO) also entered into force on January 1, 2020. These ordinances flesh out financial service providers’ consultation and information duties, authorisation conditions, and supervision of financial institutions.
Implementation Timeline
A two-year transition period for most purposes is expected to provide a smooth implementation of the new regulations. The Swiss Bankers Association has published an overview of the timetable in a news article.