Extended FinSA transitional periods on the home stretch

Dr. Günther Dobrauz Partner and Leader Legal, PwC Switzerland 11 Sep 2019

According to the Federal Council's timetable, the final versions of the Financial Services Ordinance (FinSO) and the Financial Institutions Ordinance (FinIO) are set to be published at the beginning of November 2019. It is planned that both ordinances enter into force together with the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA) on 1 January 2020.

1. State Secretariat for International Finance (SIF) advocates for extended transitional periods

Although the draft version of the FinSO provides generous transitional periods with regard to the fulfilment of the legal obligations of the FinSA, some financial service providers argued, that the scheduled date of entry into force leaves too little time to fully implement the new requirements. For this reason, the SIF conducted a survey amongst the competent industry associations about the date of the effective entry into force as well as the scheduled transitional periods. Based on the feedback received, the SIF reached the conclusion to recommend the Federal Council to set the entry into force date of both laws for 1 January 2020. At the same time, the SIF requested the Federal Council to implement a two-year instead of a one-year transitional period for certain FinSA code of conduct provisions.

2. Transitional periods according to FinSA at a glance

Given that the Federal Council approves the proposal of the SIF, the following transitional provisions apply:

3. Affected financial service providers and impact in general 

The (extended) transitional periods, will apply equally to all financial service providers. In principle, most financial service providers may welcome the solution requested by the SIF. This leaves them with additional time of one year to implement the legal requirements. Irrespective of the extended transitional periods, financial service providers must pay particular attention to meet the FinSA obligations, which will enter into force as of 1 January 2020. For example, the requirements regarding the best execution of client orders as well as the provision of documents will apply already at the beginning of next year.

4. Impact on financial service providers that are subject to CISA in particular

With the entry into force of FinSA, uncertainty remains particularly for existing licensees under the Collective Investment Schemes Act (CISA). The current CISA provisions on distribution and hence on the code of conduct will be deleted without substitution by the introduction of the FinSA (and FinIA) and the revision of CISA itself. In the meantime as of 1 January 2020, licensees under CISA have two years to comply with the code of conduct rules under FinSA. However, despite the resulting "vacuum", it is unlikely that they will not have to comply with some sort of code of conduct. This was also the reason why the Swiss Funds & Asset Management Association (SFAMA) has recommended the SIF to set the entry into force date of the law to 1 January 2021, while shortening the transitional periods regarding the code of conduct provisions.

5. Next steps for financial service providers

In a nutshell, by the end of the year financial service providers should carefully examine, if they still have a need for concrete action, in order to comply with the new legal requirements. Moreover, they must ensure that they meet all legal requirements according to FinSA at the latest by the end of the transitional periods. 

 

Contact us

Dr. Günther Dobrauz

Dr. Günther Dobrauz

Partner and Leader Legal, PwC Switzerland

Tel: +41 58 792 14 97

Martin Liebi

Martin Liebi

Director, Legal, PwC Switzerland

Tel: +41 58 792 28 86

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

Philipp Rosenauer

Philipp Rosenauer

Head Legal Regulatory Implementation, Legal, PwC Switzerland

Tel: +41 58 792 18 56

Peter Würinger

Peter Würinger

Assistant Manager, PwC Legal Switzerland, PwC Switzerland

Tel: +41 58 792 1748

Mark A. Schrackmann

Mark A. Schrackmann

Assistant Manager, Legal, PwC Switzerland

Tel: +41 58 792 2560

Michèle Hess

Michèle Hess

Partner, Regulatory & Compliance Services, PwC Switzerland

Daniel Müller

Daniel Müller

Director, PwC Financial Services, PwC Switzerland

Tel: +41 58 792 2737

Daniel Pajer

Daniel Pajer

Partner Asset Management, PwC Switzerland

Tel: +41 58 792 2486

Adrian Keller

Adrian Keller

Partner and Leader Audit for Blockchain, PwC Switzerland

Tel: +41 58 792 23 09