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Offering financial services and marketing foreign collective investment schemes in Switzerland - update on the new financial services act

Posted by on 10 September 2019

The Federal Department of Finance issued a statement yesterday clarifying certain issues regarding the new draft ordinances to the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA).   

Fidleg-FINSA-LSFIN-FINIA-FINIG-LEFINThe Federal Department of Finance issued a statement informing that the Federal Council is expected to approve at the beginning of November 2019 the final versions of the Financial Services Ordinance and of the Financial Institutions Ordinance implementing the FinSA and the FinIA.

Both acts and the implementing ordinances should enter into force on 1 January 2020.

In order to provide the market with preliminary information, the Federal Department of Finance has set out the main points on which the draft ordinances are to be amended. The main takeaways regarding the draft Financial Services Ordinance are:

  • Foreign financial advisors of prudentially supervised institutions will not need to be registered in a newly created financial advisor register to carry out their activities in Switzerland on a cross-border basis provided that they target professional and institutional investors.
  • There will be a transitional period of two years for the implementation of the classification of clients, the code of conduct, the knowledge and organisational requirements and the key information documents (instead of one year as initially planned).

Regarding the concept of financial services in the context of fund marketing, the communication does not substantially clarify the situation. The draft Financial Services Ordinance currently provides that any activity, such as intermediation, which aims specifically at the purchase or sale of financial instruments is considered a financial service. The statement provides that the term "intermediation" will be removed from the definition so that the term financial service be "not too broad but not too narrow". It further mentions exemptions in connection with corporate finance services and the sale and purchase of companies.

Further changes will be made to the information and verification requirements.

The Financial Services Ordinance, the Financial Institutions Ordinance and the Supervisory Organisation Ordinance contain the implementation provisions of the Federal Council. They were subject to a consultation procedure from 24 October 2018 to 6 February 2019.

The draft Financial Services Ordinance had triggered discussions in the market around important requirements which were considered to be unclear or overreaching. Yesterday's statement published by the Federal Department of Finance could have better clarified the concept of financial services, which is important as it is the basis of a cascade of requirements. However, the decision to exempt foreign financial advisors subject to a prudential supervision from registering with the financial advisor register reflects the market's views and is very good news.

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Photo: Claudia Beyli - Pixabay

Topics: Banking & Finance | Capital Markets

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Dunja Koch

Dunja Koch has expertise in all aspects of corporate and finance law, advising mainly UK and US clients with regard to Switzerland. She is the managing partner of the London office. She joined the firm in 1998 and became a partner in 2003. She regularly works on corporate and M&A deals, as well as leveraged and acquisition finance transactions, but also project, commodity and asset finance matters, including aircraft finance. Here, she acts on behalf of aircraft manufacturers, banks and leasing companies in relation to the Swiss aspects of acquisition of aircraft and engines. Her practice further covers regulatory matters, where she advises asset managers, funds, securities dealers and other financial institutions in relation to their cross-border activities in Switzerland. The Legal 500 United Kingdom 2018 recommended her as a top foreign lawyer in London. Chambers Global (2019) ranked her as leader in the fields of Banking & Finance (Switzerland) and Banking & Finance (UK). She was also specifically recommended in the 2018 edition of the Legal 500 EMEA for Transport Law matters and named one of IFLR1000’s Women Leaders- an elite cohort of the 300 leading female transactional experts in local markets globally. She is the only practitioner from Switzerland to be featured in the guide. Dunja Koch holds a law degree from the University of Zurich and a LL.M. from Queen Mary, University of London. She qualified in Geneva in 1997 and in England and Wales in 1999. She speaks German, French, English and Italian. She is registered on the roll of attorneys in Zurich and a member of the International Bar Association (IBA), Association Suisse de Droit Aérien et Spatial and the Aviation Club of the UK.

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Jérôme Pidoux

Jérôme's practice focuses on banking, finance and regulatory matters, as well as corporate and commercial transactions. He joined our London office as an associate in 2014. Prior to joining Froriep, he worked for several years in the corporate group of a business law firm in Geneva. He graduated from the University of Fribourg in 2004 and earned an LL.M. from New York University, as well as a Certificate in Law and Business from Stern School of Business, in 2010. He was admitted to the Geneva bar in 2009 and to the New York bar in 2013. His working languages are French and English, and he has a good command of German.

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