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FINMA adopts regulation implementing FINSA and FINIA

Dr. Jean-Claude Spillmann Director, Head Asset & Wealth Management and Banking Regulatory, Legal, PwC Switzerland 16 Nov 2020

The Swiss Financial Market Supervisory Authority (“FINMA”) has adopted its regulation implementing FINSA and FINIA. This encompasses a new implementing ordinance to FINIA, as well as changes to FINMA ordinances and circulars that need to be adjusted as a result of the implementation of FINSA and FINIA. Certain circulars will be repealed. The adjustments will come into effect as of 1 January 2021 and within the transitional periods stipulated by FINSA and FINIA.

The FINMA Financial Institutions Ordinance (FINIO-FINMA)

The new FINIO-FINMA regulates the details of professional indemnity insurance for portfolio managers, trustees and managers of collective assets, details calculating the de minimis threshold for portfolio managers and rules on risk management and ICS for managers of collective assets.

The professional indemnity insurance for portfolio managers, trustees and managers of collective assets must cover the respective business area (geographically and objectively) as defined in the organisational documents. It must include all activities for which a portfolio manager or trustee is legally responsible (negligence and gross negligence, no reduction for gross negligence permissible). In addition, follow-up liability is introduced for policies underpinned by the claims-based principle or occurrence of damage principle. It also includes the duty to set aside funds to make funds available in a liability scenario. For managers of collective assets, the regulation on insurance is similar to those of portfolio managers and trustees.

The FINIO-FINMA also contains details on calculating the de minimis threshold for gaining authorisation as a portfolio manager. The provisions entail regulation and a transfer from CISO-FINMA to FINIO-FINMA and contains amendments in respect of managers of pension fund assets, as they will also be understood as “managers of collective assets”.

Rules on risk management and internal control system for managers of collective assets: The FINIO-FINMA regulations correspond to the regulations in CISO-FINMA. In addition, a duty for liquidity risk management is introduced with FINIO-FINMA.

The FINIO-FINMA sets out a transitional period for managers of collective assets (or portfolio managers or trustees) who already have authorisation for performing their services to implement the FINIO-FINMA until 31 December 2021.

Changes to other FINMA ordinances

FINMA Collective Investment Schemes Ordinance (CISO-FINMA): Managers of collective assets and fund managers are newly regulated in FINIA, which will lead to certain changes in CISO-FINMA.

FINMA Anti-Money Laundering Ordinance (AMLO-FINMA): Changes in the AMLO-FINMA are made due to the change of terminology as well as the fact that the DSFI are no longer to be foreseen under the new regulation.

Additionally, certain minor adjustments will be made to the FINMA Collective Investment Schemes Bankruptcy Ordinance, the FINMA Banking Insolvency Ordinance and the FINMA Financial Market Infrastructure Ordinance.

Changes to FINMA Circulars

The following FINMA Circulars will be changed:

  • FINMA Circular 2018/3 “Outsourcing – banks and insurers”: Adaptation to FINIA institutions (but not portfolio managers and trustees)
  • FINMA Circular 2013/8 “Market conduct rules”: Now also includes portfolio managers, trustees and managers of pension assets
  • FINMA Circular 2013/3 “Auditing”: No direct connection with the implementation of FINSA and FINIA
  • Minor changes: FINMA Circular 2015/2 “Liquidity risks – banks”, FINMA Circular 2017/7 “Credit risks – banks”, FINMA Circular 2020/1 “Accounting – banks” and FINMA Circular 2008/14 “Supervisory reporting - banks”

In addition, certain FINMA Circulars will be repealed:

  • FINMA Circular 2008/5 “Securities Dealers”
  • FINMA Circular 2010/2 “Repo/SLB transactions"
  • FINMA Circular 2013/9 “Distribution of collective investment schemes”
How can we support you?

For the understanding what the implementation of FINSA and FINIA may mean for you and how PwC may be of assistance, see the attached one-pager.

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Contact us

Dr. Jean-Claude Spillmann

Dr. Jean-Claude Spillmann

Director, Head Asset & Wealth Management and Banking Regulatory, Legal, PwC Switzerland

Tel: +41 58 792 43 94

Barbara Gallati

Barbara Gallati

TLS Manager, PwC Switzerland

Tel: +41 58 792 40 22

Thomas Schwyter

Thomas Schwyter

Senior Manager, Legal, PwC Switzerland

Tel: +41 58 792 24 14