Swiss Banking Sector Braces for New Regulatory Landscape
In January 2020, Switzerland introduced a major overhaul of its financial market legislation, aiming to strengthen investor protection and enhance legal certainty. The new framework combines six key acts and ordinances: the Financial Services Act (FinSA), Financial Institutions Act (FinIA), Financial Market Supervision Act (FINMASA), Financial Market Infrastructure Act (FMIA), Anti-Money Laundering Act (AMLA), and related ordinances.
New Focus on Investor Self-Responsibility
The FinSA and FinIA have introduced significant changes to investor protection in Switzerland, shifting the focus from provider responsibility to investor self-responsibility. While many market participants’ duties remained largely unchanged, the new acts:
- Introduced stricter regulation of asset managers and trustees
- Enhanced conduct rules for investment advice
- Mandated compulsory review of appropriateness and suitability for clients
Key Features of the New Regulations
The key features of the new regulations include:
- Stricter prospectus requirements for financial instruments
- Extended information and documentation duties for financial service providers
- Transparency and due diligence requirements
Industry Response
The Swiss Bankers Association has welcomed the changes, praising the new framework for enhancing legal certainty and competitiveness. However, some industry experts have expressed concerns over the lack of clarity on certain issues, such as:
- Definition of minimum standards for customer advisor training
- Clarity on implementation of the new regulations
Implementing Provisions
The FinSO and FinIO ordinances came into effect on January 1, 2020, providing implementing provisions for financial service providers’ consultation and information duties, as well as authorisation conditions and supervision of financial institutions. The Supervisory Organisations Ordinance (SOO) governs the authorisation requirements for newly created supervisory organisations.
Industry Insights
Industry insiders have hailed the new regulations as a positive step towards strengthening Switzerland’s financial sector, but also acknowledged that there is still much work to be done to address remaining concerns. The road ahead will require ongoing collaboration and adaptation to ensure the continued growth and stability of the Swiss banking sector.