FINSA and FINIA: Only few differences remaining

Dr. Günther Dobrauz Partner and Leader Legal, PwC Switzerland 31 May 2018

On Tuesday 29 May 2018, the National Council debated again about the Financial Services Act (FinSA) and the Financial Institutions Act (FinIA). After the resolution of the National Council a few differences remain to the text approved by the Council of State. As the National Council could not finish the resolution of differences in its session, the Economic Affairs and Taxation Committee of the Council of the States (WAK-S) will discuss this topic in its next session. 

 

Regarding FinSA the following differences still remain open:

  • Self-regulation on the training and education of client advisors: The National Council is of the opinion that financial service providers should be able to define industry-specific minimum standards for training and education programs of client advisors. The Federal Council should be able to declare such standards binding for the respective sector.
  • Active information duty in the event of changes to information already provided: The National Council wishes to keep the provision that the financial service provider is not obliged to inform the client immediately or during the next contact with the client, if there are subsequent changes in relation to the information provided to the client.
  • No reversal of the burden of proof for prospectus and basic information sheet liability: In the event of incorrect, misleading or legally not accurate information in the prospectus, in the basic information sheet or in similar communication papers, the National Council wishes to impose the burden of proof on the client for negligent conduct (culpable liability). 
  • Reduction of penalties in relation to the basic information sheet: The National Council is of the opinion that the legal penalties foreseen for false declarations, concealment of material facts and non-publication / publication not in due time of the basic information sheet should be less than those foreseen for the same offences in relation to the prospectus.
  • Exclusion of the right of withdrawal in "door-to-door business" with existing clients of financial service providers: During the initial consultation, the National Council demanded that the conclusion of banking and financial service contracts as well as the acquisition or the sale of financial instruments by banks or financial institutions should generally not include the right to withdraw from "door-to-door transactions" (this also includes transactions conducted by telephone or online). Although the National Council wishes to maintain this exception, it has limited the provision to existing clients of banks and financial institutions.

Regarding FinIA most of the differences could be resolved. The only still open question is whether asset managers who have been performing their activity for fifteen years or more at the time the law will come into force and who do not accept new clients, should be permitted to continue their asset management activities without a license (so-called "grandfathering" clause). The National Council maintains its view that the grandfathering clause should be deleted without replacement.

What's Next

If the remaining differences will be resolved in the session of the Council of States, the entry into force of the two acts would be conceivable during 2019. The consultation draft for the ordinances of FinSA and FinIA is expected for autumn 2018.

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Dr. Günther Dobrauz

Partner and Leader Legal, Zurich, PwC Switzerland

+41 58 792 14 97

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Dr. Jean-Claude Spillmann

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

+41 58 792 43 94

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