FinSA Q&A: Documentation of suitability assessment
UBS Business Solutions AG
This product consists of 12 Q&As on the suitability and appropriateness requirements of the FinSA, focusing on the related documentation duties.
Author's Note
The product, a know-how collection entitled “ FinSA Q&A: Documentation of suitability assessment ” consists of 12 questions and answers (" Q&As ") developed by the UBS team of regulatory experts and provides you with the basis for understanding the general suitability and appropriateness requirements of the FinSA and in particular the documentation requirements in this context. 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 Suitability and Appropriateness Requirements of the FinSA When applying the FinSA in its interplay with the Swiss Financial Institutions Act (“ FinIA ”) and the revised Swiss Collective Investment Schemes Act (“ revCISA ”) financial service providers also have to understand the pertaining suitability and appropriateness requirements. The rules in their interplay can be complex and the practice is still developing. A good...
Read moreThe product, a know-how collection entitled “FinSA Q&A: Documentation of suitability assessment” consists of 12 questions and answers ("Q&As") developed by the UBS team of regulatory experts and provides you with the basis for understanding the general suitability and appropriateness requirements of the FinSA and in particular the documentation requirements in this context.
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 Suitability and Appropriateness Requirements of the FinSA
When applying the FinSA in its interplay with the Swiss Financial Institutions Act (“FinIA”) and the revised Swiss Collective Investment Schemes Act (“revCISA”) financial service providers also have to understand the pertaining suitability and appropriateness requirements. The rules in their interplay can be complex and the practice is still developing. A good understanding of this topic may hence be one of the top priorities in order to avoid regulatory and operational risks in this context.
These Q&As 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 IP, Suitability and Appropriateness section.
What you get
After you make your purchase, PartnerVine makes the Q&A available to you for download as a searchable pdf. Below are two Q&As from this product so you can see a sample of what you will get:
Samples of the Q&A
How do I need to document the information obtained from a client during my suitability assessment or appropriateness assessment?
The FinSA does not explicitly stipulate how the information collected about the client in the context of the appropriateness assessment or suitability assessment, as well as the result of it, must be documented, only that a documentation is required (art. 15(1)(a) FinSA). In this context, the law only mentions that such documentation must take place in an appropriate manner ["auf angemessene Weise"]).
It is in any case advisable and expected by FINMA to document the required information as well as the outcome of the enquiry at point of profiling in a systematic manner (e.g. in the investor profile).
This includes documentation of the questions asked when enquiring about the client’s K&E.
Do I need to document an "advice against" a transaction only if the client wants to execute the transaction nevertheless or do I need to document such "advice against" in any case?
Before providing personal investment advice (PIA) (and independently of whether such PIA is based on a written investment proposal or not), an appropriateness assessment (in the case of transaction-based advise) or a suitability assessment (in the case of portfolio-based advice) has to be conducted.
If based thereon, the client adviser comes to the conclusion that a transaction is not suitable (e.g. because the client does not have the necessary K&E and such lack of K&E could not be "healed" by educating the client accordingly), the client adviser has to advise the client against the transaction (see art. 14(2) FinSA).
In such cases, the client adviser needs to differentiate between the duty to warn the client and the duty to document such warning.
The warning in accordance with art. 14(2) FinSA needs to be displayed to the client BEFORE the financial service is provided, i.e. before the PIA is given. It hence has to be displayed to the client independently of whether the client will thereafter still decide to do the transaction or not.
However, the documentation of this warning has to be done on the basis of art. 15(1)(b) FinSA and may also be done AFTER the personal investment advice has been given. Also, this documentation does not need to be provided to the client proactively but only upon the client's request (see art. 16 FinSA).
However, unlike any documentation to be done under art. 15(2) FinSA (i.e. needs of client, reasons for recommendation), the documentation of the advice against a transaction needs to be done independently of whether the client thereafter decides to conduct the transaction or not.
The same principles apply where the client adviser does not receive the necessary information from the client in order to conduct an appropriateness assessment or suitability assessment and hence has to inform the client that he/she is unable to perform such assessment on this basis (see art. 14(1) FinSA). Such information provided to the client needs to be documented in line with art. 15(1)(b) FinSA and hence, independently of whether the client thereafter decides to conduct a transaction or not.
Who needs it
The FinSA Q&A: Documentation of suitability assessment 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 these FinSA conduct duties 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).
Relative Advantage
The FinSA Q&A: Documentation of suitability assessment gets rid of the need to research Swiss regulatory requirements regarding these conduct duties. 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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