FinSA Q&A: Client Classification - Prof. Treasury
UBS Business Solutions AG
This product consists of 12 Q&As with elaborations on the elements of the term “professional treasury”, including 7 standard forms and templates.
Author's Note
The product, a know-how collection entitled “ FinSA Q&A: Client Classification – Prof. Treasury ” consists of 12 questions and answers (" Q&As ") as well as 7 standard form templates developed by the UBS team of regulatory experts and provides you with the basis for understanding the elements of the term “professional treasury”. Your purchase gives you access to a know-how collection prepared by UBS and may serve as a basis for you to establish your best practices as a financial service provider. The Swiss regulatory standard for Client Classification The FinSA in its interplay with the Swiss Financial Institutions Act (“ FinIA ”) and the revised Swiss Collective Investment Schemes Act (“ revCISA ”) includes extensive requirements on how clients should be classified. The definitions and procedures for classifying clients under the FinSA are complex and the practice is still developing. Proper client classification may hence be one of the top priorities in order to avoid...
Read moreThe product, a know-how collection entitled “FinSA Q&A: Client Classification – Prof. Treasury” consists of 12 questions and answers ("Q&As") as well as 7 standard form templates developed by the UBS team of regulatory experts and provides you with the basis for understanding the elements of the term “professional treasury”.
Your purchase gives you access to a know-how collection prepared by UBS and may serve as a basis for you to establish your best practices as a financial service provider.
The Swiss regulatory standard for Client Classification
The FinSA in its interplay with the Swiss Financial Institutions Act (“FinIA”) and the revised Swiss Collective Investment Schemes Act (“revCISA”) includes extensive requirements on how clients should be classified. The definitions and procedures for classifying clients under the FinSA are complex and the practice is still developing. Proper client classification may hence be one of the top priorities in order to avoid regulatory and operational risks in this context.
These Q&As and sample forms are essential practical knowledge for those that provide financial services in Switzerland or to clients in Switzerland.
For a full overview of the questions covered by this product, see Questions answered by UBS' FinSA Q&A under the Client Classification section.
What you get
After you make your purchase, PartnerVine makes the Q&A available to you for download as a searchable pdf. The pdf includes both the Q&As and the forms and templates sold as part of the FinSA Q&A: Client Classification – Prof. Treasury. Below are two Q&As from this product so you can see a sample of what you will get:
Samples of the Q&A
What does the term “professional treasury” mean under the FinSA?
In contrast to business literature, before the entering into force of the FinSA/FinSO, there was no clear definition for the term "professional treasury" in any financial market laws, which led to delimitation problems. With the introduction of art. 3(8) FinSO, for the first time, the term was codified as follows: a company or a private investment structure (these FAQ use the term: private investment vehicle [PIV]) is deemed to have a professional treasury if, within or outside the company, it entrusts, on a permanent basis, the management of its funds to a professionally qualified person with experience in the financial sector. The regulation specifies whether that person may be employed within/internally or outside the company/externally. However, it does not specify as to whether a professional treasury is given by mandating a financial expert or a financial service provider or asset manager within the meaning of art. 2(1) FinSA or whether further professional requirements are to be fulfilled in order to be considered as professional treasury.
Professional accounting, regardless of whether a spouse does the accounting, or an asset management mandate (for maintaining value or optimizing returns), can probably not be considered as sufficient on its own.
Cash and treasury management generally covers liquidity planning and the disposition of liquid assets, hence the activity that controls a company's cash holdings, corresponding cash flows and cash management.
In view of the risks to mis-classify a client as professional client and, based thereon, the need for a conservative assessment of the criteria, it cannot be assumed that engaging an external asset manager as such qualifies as having a professional treasury, unless the criteria laid out for the professional treasury are fulfilled, in particular, regarding cash and treasury management. Whether the asset management mandate/agreement specifically covers cash and treasury management must therefore be assessed based on the concrete circumstances.
Where does the term "professional treasury" derive from?
While the term “professional treasury” was also used under the superseded CISA stipulating that companies and public entities with a professional treasury were deemed qualified investors (art. 10(3)(c) and (d) superseded CISA), there was neither a definition within the superseded CISA, nor full clarity on the details of the term. The core elements of professional treasury were rather derived from the "FINMA Circular 2008/03 “Public deposits with non-banks". Under the FinSA, public entities, companies, private investment structures created for high-net-worth retail clients and occupational pension schemes, each with professional treasury as well as other occupational pension schemes providing professional treasury operations are considered professional clients and are required to be classified accordingly (art. 4(3)(e)-(g) and (i) FinSA).
Who needs it
The FinSA Q&A: Client Classification - Prof. Treasury is for financial service providers providing their services in Switzerland or to clients in Switzerland. If you are a financial service provider, this product helps you understand the FinSA client classification requirements and implement them.
About UBS
UBS Business Solutions AG ("UBS") is a wholly-owned subsidiary of the UBS Group AG. For more information on UBS, go to www.ubs.com.
Key features
Key features of this product include:
- Structured & easy-to-read. Structured in a reader-friendly, easy-to-access Q&A format that is aligned with the relevant regulations.
- Easy-to-understand. The language is practical and business friendly. The explanations in the text are accompanied by tables and graphics which make it easier to understand and communicate the regulations.
- Interconnected. The Q&As include references to related content in other modules of UBS' FinSA Q&A and third party content to help readers understand the issues.
- Categorization. All of the Q&As are categorized into specific topic groups which you can adapt to your individual needs.
- Upskilling your employees. Underlined terms are explained in the Glossary, which is a complementary product that comprises over 160 terms and definitions. Together with the Glossary, the Q&As provide knowledge management support not just for employees that know an issue well, but employees that need to learn about an issue, increasing expertise across your firm.
- Cost & time savings. You receive extraordinary value when you purchase this product. As your usage increases, your savings increase dramatically (see the Relative Advantage Calculator on the left hand side and the section below on the Relative Advantage Calculator, which will help you understand the value of this product).
- Valuable forms and templates. The forms and templates included with the product were prepared by UBS' regulatory team. The forms and templates in this product include:
- Opt-out form from retail to professional client for natural persons
- Opt-out form from retail to professional client for legal persons
- Opt-out form from retail to professional client for private investment vehicle
- Opt-out form from retail to institutional client for Swiss and non-Swiss CIS and ManCO
- Opt-out form from professional to institutional client
- Opt-in form to retail client
- Opt-in form to professional client
Relative Advantage
The FinSA Q&A: Client Classification – Prof. Treasury gets rid of the need to research Swiss regulatory requirements regarding the elements of the term “professional Treasury”. The Relative Advantage Calculator on this page shows a conservative use case, and the amount you would save compared to doing the tasks without the benefit of our product. For the calculator, we've taken an hour as the estimate for a lawyer charging CHF 450 per hour to research the answer to one of our Q&As. Our assumptions are conservative ones based on our experience. If you'd like to change our assumptions, you can do so in the calculator and run the number again. The value delivered by our product is meaningful in the vast majority of circumstances, and exceptional as your usage increases.
Circumstances of Use
This product is intended for Swiss financial service providers and financial institutions and provides general information on the FinSA and related laws as of the date of finalization. Our objective is to provide the UBS' perspective of the law in order to help support a better understanding of the new regulatory framework in Switzerland. This product can be used either for implementing the new regulatory framework or as the basis of your own internal knowledge management. This product is not for use outside of Switzerland.
Important Terms
- This product is provided to you only for use in Switzerland.
- You are required to pay for this product by invoice after you have received it. As digital products are so easily replicable, there is no right of rescission for this product and your obligation to pay is unconditional.
- This product is provided to you on a non-reliance basis. There is no guarantee that this product will address your particular facts and circumstances, and you will have no recourse to UBS or PartnerVine if you do not think it does.
- Use of this product does not create an attorney-client relationship with UBS Business Solutions AG or PartnerVine, nor should the product be considered a substitute for qualified legal advice. If you need advice tailored to your facts and circumstances, please consult qualified counsel.
- Your contract for this product is with UBS Business Solutions AG. You will not have recourse to PartnerVine in respect of your use and enjoyment of this product.
Support
This product is a downloadable pdf. There is no additional support for this product.
Demonstration video
This video provides an overview of the "FinSA Q&A" offer from UBS. The video refers to the complete set of Q&As from UBS, and is helpful as an orientation for UBS' offering on PartnerVine.
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