FinSA/FinIA: Regulatory deadlines to be complied with


On 1 January 2020, the new regulatory framework for financial services providers and financial institutions under the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) entered into effect. The FinSA also introduced a new regime for primary and secondary market transactions in securities, including a new requirement to have a prospectus prepared in compliance with the rules of the FinSA, and to obtain the approval from a Swiss review body (a Prospectus Review Body), to the extent that securities are offered to the public or admitted to trading on a Swiss trading venue, unless an exemption from the FinSA prospectus requirements is available. In this context, we refer to our earlier Schellenberg Wittmer newsletters. Compliance with the regulatory obligations under the FinSA and the FinIA is subject to certain transition periods. The following recent licensing and recognition decisions by the Swiss Financial Market Supervisory Authority (FINMA) and the Federal Department of Finances (FDF) trigger regulatory deadlines:

1. Licensing of Prospectus Review Bodies

With effect as of 1 June 2020, FINMA licensed SIX Exchange Regulation AG (SER) and BX Swiss AG (BX Swiss) as Prospectus Review Bodies.

This licensing decision triggered the 6 months transition period pursuant to article 109 para. 1 of the Swiss Financial Services Ordinance (FinSO) with the result that a FinSA prospectus, if required, must be approved by a Prospectus Review Body as of 1 December 2020.

During the transition period until 1 December 2020, it is still possible (i) to offer debt or equity securities to the public in compliance with the disclosure rules of the Swiss Code of Obligations instead of preparing a FinSA prospectus, (ii) to have securities admitted to trading on a Swiss trading venue according to the applicable listing rules, and (iii) to issue structured products on the basis of a Swiss simplified prospectus prepared in compliance with the rules of the Swiss Collective Investment Schemes Act (CISA) as in place prior to 1 January 2020.

2. Recognition of Ombudsman

On 24 June 2020, the FDF recognized the Swiss Banking Ombudsman Foundation, the Ombudsman's Office for financial service providers, the Finanzombudsstelle Schweiz (FINOS) and the OFS Ombud Finance Switzerland as ombudsman services for the purposes of the FinSA.

This decision triggers the 6 months timeline pursuant to article 108 FinSO in connection with article 95 para. 3 FinSA. As a result, a financial services provider and financial institution subject to the requirement to be affiliated with an ombudsman service pursuant to article 77 FinSA and article 16 FinIA must submit an affiliation request by 24 December 2020 to one of the ombudsman services recognized by the FDF on 24 June 2020 or any further ombudsman service recognized by the FDF prior to 24 December 2020.

Note that a proposal is pending in Swiss Parliament to amend the rules of the FinSA and the FinIA by exempting financial services providers and financial institutions from this affiliation requirement if they are only transacting with professional or institutional clients in the sense of the FinSA.

3. Approval of Register of Client Advisors

With effect from 20 July 2020, FINMA authorized BX Swiss AG as the first registration body for client advisors in the sense of article 28 et seq. FinSA.

This authorization triggers the 6 months timeline pursuant to article 107 FinSO in connection with article 95 para. 2 FinSA. As a result, any client advisors who must be registered in the register of client advisors pursuant to the rules of the FinSA must submit their application by 19 January 2021 at the latest.

Note that foreign financial services providers subject to prudential supervision in their home jurisdiction that are transacting only with professional or institutional investors in Switzerland are exempted from this requirement under the FinSO.

4. Approval of first Supervisory Organisations

With effect from 6 July 2020, FINMA authorized the Organisme de Surveillance des Instituts Financiers based in Geneva (OSIF) and the Organisation de Surveillance Financière based in Neuchâtel as supervisory organisations for portfolio managers and trustees in the sense of the FinIA and article 43a of the Financial Market Supervision Act.

This authorization triggers the one year compliance period for firms that started a new business as a portfolio manager or trustee since 1 January 2020 or are starting such new business going forward. By 6 July 2021, such firms will have to submit a licensing application as a portfolio manager or trustee in addition to registering with FINMA pursuant to article 74 para. 3 FinIA prior to starting their operations.

For portfolio managers and trustees that were already operational prior to 1 January 2020 and continue their business operations, the timeline for the submission of their licensing application has not changed. Such licenses must be obtained during the three year period ending on 31 December 2022.

5. Key Deadlines

1 December 2020 – FinSA prospectus approvals
24 December 2020 – adherence to a recognised ombudsman service
19 January 2021 – application to registration body for client advisors
6 July 2021 – licensing application for asset managers/trustees that started their activity after January 1, 2020


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