Update FinSA/FinIA – September 2019

Update FinSA/FinIA – September 2019
On September 9th, 2019, the FDF issued a short announcement entitled ” FinSO and FinlO in the final stages ” in which it updated the two laws and their ordinances. The final ordinances are expected to be published in early November.
The main points of the announcement
  • The Federal Department of Finance (FDF) will propose to the Federal Council that the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) – together with the Federal Council’s implementing ordinances – come into force on 1 January 2020.
  • Transitional periods of two years are foreseen for the FinSA conduct obligations.
  • The threshold for the market entry of foreign financial service providers has been lowered; there is no longer any registration requirement for foreign client advisors (prudentially supervised) of professional or institutional clients.
  • A few simplifications in connection with the basic information sheets have been made in FinSO (can be made available to private clients for execution only services even after the transaction has been concluded; basic information sheets may also be in English).
  • The requirements for the professional experience and training of qualified managing directors of asset managers and trustees were specified in FinIO.
  • The thresholds in FinIO, according to which the independence of risk management and compliance over profit-oriented activities is not required, have been raised; however, regardless of its size, this exception only applies if a business model without increased risks is in place.
Conclusion
There should no longer be any obstacles with regards to FinSA/FinIA coming into force on January 1st, 2020. The extension of the transitional period for FinSA duties of conduct to two years makes sense and gives the industry sufficient time to adapt its processes to the new laws. With regards to the required independence of the risk & compliance function, it will be interesting to see where the regulator will draw the line between the business model without increased risks (no independent risk & compliance function required) and the business model with increased risks (independent risk & compliance function required).This does not seem to be specified in the final ordinances either.

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