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26 August 2019

FinSA / FinIA – Our blog series with the most important findings for the business world (post 2)

Certain client advisors of Swiss and non-Swiss financial service providers with clients in Switzerland must be registered in the new advisor register created by the Swiss Financial Services Act (FinSA - German only).

Client advisors

Client advisors are natural persons who provide financial services in their own name or in the name of a financial service provider.

This does not include employees of financial service providers without client contact or those who support the provision of services only in a subordinate manner (e.g. through activities of a purely administrative nature).

It is still unclear at present, i.e. before the publication of the Financial Services Ordinance (FinSO) expected in autumn 2019, who will be regarded as client advisors in addition to the traditional investment advisors.

Registration obligation

Before they carry out their activities in Switzerland or by 30 June 2020 at the latest, client advisors of unregulated domestic financial service providers, namely pure investment advisors, as well as foreign financial service providers must be entered in the new advisor register created by FinSA.

Client advisors of supervised domestic financial service providers (such as bank employees) are exempt from the registration requirement. The FinSO draft (German only) only provides for very limited exceptions for client advisors of foreign financial service providers. It remains to be seen whether the final regulation will be made somewhat more liberal.

The obligation to register applies only to the client advisors themselves, not their employers.

Registration requirements

Before a client advisor can even be entered in the advisor register, he must provide the following evidence:

Positive:

  • sufficient knowledge of the FinSA rules of conduct;
  • the expertise necessary for the performance of his duties;
  • professional liability insurance or equivalent financial security; and
  • affiliation of the client advisor themselves or their employer or client to an ombudsman.

Negative:

  • no criminal record entry for offences against the assets; and
  • no prohibition on activity or profession imposed by FINMA due to breach of supervisory regulations.

When examining the application of a client advisor, the registration office shall, in particular, have discretion as to whether the client advisor has sufficient knowledge of the FinSA rules of conduct and of the specialist knowledge required for the performance of his duties. The concrete requirements will probably only be defined at the level of self-regulation.

The fee for entering a client advisor in the advisor register is between CHF 500 and CHF 2,500.

The registration requirements must be met permanently and the registration office must be informed of any changes in this regard. The necessary organisational measures - including compliance with deadlines - must therefore be taken.

A client advisor who no longer fulfils a registration requirement will be deleted from the advisor register by the registration office.

Advisor register

The advisor register contains information on the client advisor, the financial service provider for whom he works, the fields of activity, the training and further education completed by the client advisor and the ombudsman to whom the client advisor or the financial service provider for whom he works is affiliated.

In this way, a client can obtain information about a client advisor. The provision of financial services - including those of client advisors from abroad, cross-border into Switzerland - is prohibited without registration in the advisor register of the client advisor who is subject to registration.

Registration offices

It can currently be assumed that there will be several registration offices to examine applications for registration of client advisers and to keep registers of advisers. They will be approved by FINMA as soon as possible after the FinSA comes into force, depending on the quality of the application.

Our Banking & Finance team will be happy to answer any further questions you may have.

Author: Adrian Dörig

Topics: Capital MarketsFinSAClient advisors

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