updated 2:07 AM CEST, May 17, 2022

PwC Legal Switzerland issues new regulation heads-up to U.S. financial services providers

U.S. financial services providers that provide in-bound financial services on a cross-border basis from outside of Switzerland are being urged to take notice of new regulations that are expected to take effect on Jan. 1, 2020.

So says PwC Legal in Switzerland, which has been flagging up the existence of the new, so-called Swiss Financial Services Act (FinSA), and the specific implementing ordinance, known as FinSO (Financial Services Ordinance).

Martin Liebi of Zurich 3According to Martin Liebi (pictured left), director of PwC Legal Switzerland, U.S. financial service providers that provide financial services on a cross-border basis from outside of Switzerland to Swiss clients – no matter whether they are retail, professional or institutional clients – will, under the new law, “be affected for the first time” by Swiss regulations.

“The production of financial instruments for the Swiss market by U.S. producers is also for the first time comprehensively regulated” by FinSA, Liebi says.

Until now, cross-border provision of financial services from abroad into Switzerland has been largely unregulated, except where financial services providers had permanently- employed personnel on the ground in the country who were active there in a professional capacity.

Liebi says Swiss lawmakers conceived FinSA with the aim of creating “uniform competitive conditions for financial intermediaries,” as well as to “improve client protection and harmonize the authorization rules for financial service providers.”

He says the new provisions will introduce certain information, documentation, and behavioral rules, as well as organizational requirements, such as rules to prevent conflicts of interest, and commissions paid by third parties.

Although similar to requirements introduced across Europe by the recently revised Markets In Financial Instruments Directive (MiFID II), the new FinSA rules are different in certain respects, and also “affect also the client adviser on a personal level,” according to Liebi.

Such advisers will also now be obliged to become listed on a new Swiss “client advisor register” that will be run by Regservices.ch, a private company that is currently undergoing the licensing process with the Swiss regulator, the Swiss Financial Market Supervisory Authority (FINMA).

(MiFID II doesn’t provide for such a register, although certain jurisdictions, such as Germany, have introduced them.)

More information on the new FinRA regulations may be found on the PwC Switzerland website by clicking here.