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3 Reasons Why You Should Be Concerned about FinSA – and 3 Others Why You Don’t Need to Lose Sleep over It

Background 11 Jun 2019

3 Reasons Why You Should Be Concerned about FinSA – and 3 Others Why You Don’t Need to Lose Sleep over It

Every time there’s a new regulation, the reactions range from moans to sheer terror. Swiss financial institutions that will be affected by the Financial Services Act (FinSA), however, have no reason to panic.

The Swiss Financial Services Act (FinSA) was passed by the Swiss parliament on 15 June 2018 and will come into force on 1 January 2020. There are three reasons why now is the time for Swiss financial institutions to take a look at the consequences this act will have.

  1. FinSA will go into effect on 1 January 2020. The time to prepare for it is now. What’s more, the new rules could still change as the ordinance (FinSO) has not been finalized yet.
  2. FinSA, ultimately, serves to protect investors. A better informed end investor is a better protected end investor. This means that overall the market is more healthy as well. It’s a win-win.
  3. FinSA lays down some rules on the orderly distribution of financial instruments. For this reason, Swiss financial institutions should also take steps to protect themselves from compliance breaches and legal risks associated with these new rules.
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Institutions that choose a holistic compliance approach have no reason to fear the upcoming changes. There are three reasons why you don’t need to worry about FinSA:

  1. FinSA may feel familiar to you. The basic information sheets (BIBs) which serve to protect private investors are similar to the EU Key Information Documents (KIDs) for complex investment products, so-called PRIIPs. They are so similar that the regulations allow client advisors to use PRIIP KIDs instead of BIBs.
  2. FinSA is not quite as strict as MiFID II. The Swiss Act does not cover all parts of the EEA regulation, e.g. there is no requirement to classify financial instruments as Complex / Non-complex” and BIBs are not mandatory for trading of OTC derivatives. This makes complying with the new rules simpler.
  3. FinSA will be implemented at SIX. The experience SIX has gained from collaborating with issuers on KIDs for PRIIPs can be directly transferred to BIBs under FinSA. If they are not already covered by the existing KIDs, you can make new ones for the FinSA-relevant BIBs using the existing SIX documentation platform.

Jacob Gertel

As Senior Content Manager for Legal & Compliance Data at SIX, Jacob Gertel is responsible for analyzing and implementing data and products in connection with taxes, regulations and compliance (e.g. FATCA, FTT, AIFMD, MiFID II and FinSA). Before joining SIX in 2011, he served as compliance manager and head of the compliance departments at various international banks in Switzerland.

Let SIX Help You with FinSA

SIX has got long-standing experience in providing financial data for regulations like PRIIPs and supporting the industry with expertise and know-how. Contact us today and we will outline how we can jointly turn your challenges with FinSA into your advantage. 

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