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FinSA Q&A: Scope

FinSA Q&A: Scope

UBS Business Solutions AG

Date: November 18, 2021

This product consists of 64 Q&As on the scope of the FinSA.

PV10255
$3,495.26

Author's Note

The product, a know-how collection entitled “ FinSA Q&A: Scope ” consists of 64 questions and answers (" Q&As ") developed by the UBS team of regulatory experts and provides you with the basis for understanding the scope of the FinSA. 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 Scope 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 which providers, institutions, persons and situations are in scope of these regulations. 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...

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The product, a know-how collection entitled “FinSA Q&A: Scope” consists of 64 questions and answers ("Q&As") developed by the UBS team of regulatory experts and provides you with the basis for understanding the scope of the FinSA.

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 Scope 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 which providers, institutions, persons and situations are in scope of these regulations. 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 Scope 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

Who qualifies as a financial service provider under the FinSA?

The FinSA knows two categories of financial service providers: Swiss financial service providers and foreign financial service providers. Banking group’s entities are in scope if they are (1) rendering financial services in Switzerland or (2) for clients in Switzerland. 

The first test (rendering a financial service in Switzerland) applies to Swiss financial service providers and includes either (1) entities that are incorporated in Switzerland or (2) foreign financial service providers which have established a branch or a representative office, including a de facto branch or representative office (Permanent Establishment), in Switzerland. The FinSA applies to Swiss financial service providers regardless of whether they provide financial service for clients in Switzerland or abroad. 

The second test (rendering a financial service for clients in Switzerland) applies to foreign financial service providers. As a rule, the FinSA applies to them if they render financial services into Switzerland to clients domiciled in Switzerland, provided that such rendering of financial services does not create a Permanent Establishment (otherwise test 1 applies). Exception to the rule is the reverse solicitation principle. This concept is not explicitly stated in the law but specified in art. 2(2) FinSO and further explained in the Explanatory Report. Under the reverse solicitation exception, FinSA conduct rules are not applicable to foreign financial service providers if they render the financial service to a client domiciled in Switzerland within a service (contract) level that has been requested at the exclusive initiative of the client (c.f. question 4.11.). 

In sum, to determine if an entity is in or out of scope of the FinSA one needs to look at the client domicile, the financial service provider "domicile" and, in case of foreign financial service providers, whether the client has exclusively requested the service. The booking center of the client is irrelevant. In the context of the reverse solicitation concept under the FinSA, please also refer to question 4.11..

The FinSA considers the criterion of a “commercial basis” as being satisfied if there is an independent economic activity pursued on a permanent, for-profit basis (see art. 3(c) FinSA).

For exceptions relating to reverse solicitation or group companies, see dedicated question 4.11. and question 2.7.

What offering outside of Switzerland is in scope?

Offering financial instruments outside of Switzerland is not in scope of the FinSA. 

However, art. 70 FinSA stipulates certain requirements to be met when structured products are offered in or from Switzerland. However, the mere fact that a structured product is issued by a Swiss entity does not mean that this product is deemed to be offered from Switzerland.

The restriction that the issuer, guarantor or provider of collateral of structured products must be a Swiss bank, insurance company, investment firm or an equivalent supervised foreign institution only applies to an offer in or from Switzerland to retail clients without a long-term asset management or investment advisory relationship. Asset management and investment advisory clients may be offered structured products which are not issued, guaranteed or secured by a prudentially supervised institution, even if they are retail clients. In this context, however, it should be noted that asset management and investment advisory clients are generally considered to be retail clients and therefore the obligation to prepare a key information document (KID) applies, if structured products are offered to investment advisory clients.

 

Who needs it

The FinSA Q&A: Scope 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 scoping rules 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: Scope gets rid of the need to research Swiss regulatory requirements regarding the scope of the FinSA. 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.




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