finsa/finia: what needs to be done? and when? practical
TRANSCRIPT
26 February 2020
FinSA/FinIA: What needs to be done? And when? Practical insights for the transition
1. Overview Hot TopicsDr. Alexander Vogel
2. Transistion Periods for Portfolio ManagersDr. Reto Luthiger
3. Transition Regime and Interface FinSA/FinIA and Funds Regulations Stephanie Comtesse
4. Transition into the new Prospectus and Key Information Document RegimeDr. Wolfgang Müller | Ülkü Cibik
Transition Regime and Interface FinSA/FinIA and Funds RegulationsStephanie Comtesse
1. Main Impact of FinSA/FinIA on Fund Regulations2. No more Distribution: Qualification of Marketing a Fund now?3. Client Segmentation4. Qualified Investors5. Important Transitional Provisions6. Implementation Timeline7. Marketing of Funds in Switzerland – Very Frequently Asked Questions8. Case Study
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
Meyerlustenberger Lachenal AG, Attorneys at Law www.mll-legal.com │ www.mll-news.com
IntroductionMain Impact of FinSA/FinIA on Fund Regulations
30
MAIN CHANGES
QI newly defined
Client advisor/register
Ombudsman for FS
Nodistribution/distributor
License for managers of “collective
assets”
No Rep + P.A. for QIs
Meyerlustenberger Lachenal AG, Attorneys at Law
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
www.mll-legal.com │ www.mll-news.com
No more Distribution: Qualification of Marketing a Fund now?1. Financial Service?
31
Activities for (end) clients 1. acquisition or disposal FS2. receipt/transmission FS3. portfolio management4. investment advice5. loans to finance transactions with FS
FinSA Art. 3 lit. c
“…any activity addressed directly at certain clients that
is specifically aimed at the acquisition or disposal of a
financial instrument.”
FinSO Art. 3 Para. 2
Financial Service Consequences:− Registration as client advisor/Affiliation ombudsman− Conduct and organisational rules− Client segmentation
Meyerlustenberger Lachenal AG, Attorneys at Law
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
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No more Distribution: Qualification of Marketing a Fund now?2. Offer?
32
“an offer is any invitation to acquire a financial instrument that contains sufficient information on the terms of the offer and the financial instrument itself;”
FinSA Art. 3 lit. g
“An offer within the meaning of Article 3 letter g FinSA exists if a communication of any kind is made which:a. contains sufficient information on the terms of the offer and the financial instrument; andb. is customarily intended to draw attention to a certain financial instrument and to sell it.”
FinSO Art. 3 Para. 5
Offer Consequences:− Documentation obligations− Foreign fund retail clients: appointment of rep and paying agent + FINMA approval− HNWI only: Rep + paying agent (after transitional period)
Meyerlustenberger Lachenal AG, Attorneys at Law
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
www.mll-legal.com │ www.mll-news.com
Client SegmentationOptions for Clients
Institutionalclients(FinSA)
Qualifiedinvestors
(CISA)
Professional clients(FinSA)
33
Retail clients
Meyerlustenberger Lachenal AG, Attorneys at Law
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
www.mll-legal.com │ www.mll-news.com
Qualified Investors34
Regulated financial intermediaries Insurance companies Foreign prudentially supervised
clients Central banks Supranational and national public
law entities with professional treasury
Institutional QI Professional QI
Public entities, pension fundsand other pension schemes with professional treasury Companies with professional treasury Large companies (2 of 3 conditions): Balance sheet CHF 20 mio Turnover CHF 40 mio Equity CHF 20 mio High net worth individuals with opt-out
(assets reduced to 2 mio) Private investment structures with
professional treasury
Clients with discretionary AM or advisory agreement
FinSA
FinSA + CISA FinSA
CISA
Meyerlustenberger Lachenal AG, Attorneys at Law
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
www.mll-legal.com │ www.mll-news.com
35Important Transitional Provisions
Art. 103 FinSO
Art. 104 FinSO
Art. 105 FinSO
Art. 106 FinSO
Art. 74 FinIA
[…..]Art. 95
FinSA/ Art. 107, 108 FinSO
Client Segmentation
Client advisors
knowledge
Organisationalmeasures […..]
managers of pension
scheme assets
Conduct rules, Rep/P.A.,
distr. agreements, SFAMA selfregulation
Client advisorsregistration,
ombudsman, etc.
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
Meyerlustenberger Lachenal AG, Attorneys at Law www.mll-legal.com │ www.mll-news.com
Implementation Timeline
36
1.1.2020 HY 1.1.2021 HY 1.1.2022 HY 1.1.2023
FinSAFinIA
CISA lCISA ll
+?1 3 2
4
5
6
7
1 New qualification as QI
2 -Client advisor registration-Affiliation ombudsman
3 Notification of AM of pension schemes
4 Prolongation of current CISA provisionsuntil FinSA compliant:-Rep + P.A. for non-regulated QIs-Distribution agreement with 3rd parties
5-New client segmentation-New client advisor knowledge
6 Rep + P.A.:-HNWI with opt-out (the only QI)-foreign funds for non-QI
7 Application as manager of collective assets for managers of pension schemes
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
Meyerlustenberger Lachenal AG, Attorneys at Law www.mll-legal.com │ www.mll-news.com
Marketing of funds in SwitzerlandVery Frequently Asked Questions
1. What changes?
2. Who can I market− foreign UCITS funds (FINMA approved),
− foreign alternative funds (not approved or authorised), or
− Swiss funds to?
3. Which actions are to be taken?− regulatory measures (registrations, notifications, affiliations)
− contractual measures (Swiss representative, paying agent, placement agent/ex-distributor)
− internal processes (conduct and organisational rules)
− fund documentation updates/Swiss finish
4. When?
37
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
Meyerlustenberger Lachenal AG, Attorneys at Law www.mll-legal.com │ www.mll-news.com
Client 1: UK Manager with old Distributor License andphysical Presence in Switzerland Markets UCITS and AIFs in Switzerland
Markets UK managed accounts in Switzerland
38
I hear we can terminate the Representation and Paying
Agent Agreement! How do wedo this quickly?
Do we still need to have special information in our
marketing documentation?
So now, we are fullyunregulated, just a normal
Swiss company, right?
We do not need a Swissombudsman, please confirm?
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
Meyerlustenberger Lachenal AG, Attorneys at Law www.mll-legal.com │ www.mll-news.com
Client 2: US Alternative Manager with no physical Presence in Switzerland
Cross-border marketing of FINMA approved UCITS
AIFs marketed to QIs
Prospects include family offices and HNWIs
Currently manages monies for Swiss pension funds from abroad
39
How do the new rules impact us? What about reverse solicitation exemption?
How does the pension fund qualify under the new rules? We do not
want all the appropriateness/ suitability review obligations…
When can investors start opting-out?
FinSA/ FinIA: What needs to be done? And when? Practical insights for the transition
Meyerlustenberger Lachenal AG, Attorneys at Law www.mll-legal.com │ www.mll-news.com
Client 3: European Group Company in Switzerland with Representative and Asset Manager License
Act as Swiss representative for their own UCITS and AIFs
Manages the AIF from Switzerland
Markets the entire range of funds in Switzerland
Manages individual portfolios for clients in Switzerland
40
How can we simplify the reporting obligations in Switzerland particularly
regarding the licenses?
What new obligations would be triggered by making changes to the
structure?
What would our timeframe be?