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FinSA Q&A: Client Classification - MiFID II_FinSA

FinSA Q&A: Client Classification - MiFID II_FinSA

UBS Business Solutions AG

Date: October 29, 2021

This product consists of 31 Q&As on the comparison of client classification under the FinSA to the MiFID II standard, including 7 forms and templates.

PV10256
$1,196.86

Author's Note

The product, a know-how collection entitled “ FinSA Q&A: Client Classification - MiFID II_FinSA ” consists of 31 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 adhering to the client classification requirements under the new Swiss Financial Services Act (" FinSA "). The Q&As provide a comparison of the Swiss standard with the client classification concepts under the EU's MiFID II regime. 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...

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The product, a know-how collection entitled “FinSA Q&A: Client Classification - MiFID II_FinSA” consists of 31 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 adhering to the client classification requirements under the new Swiss Financial Services Act ("FinSA"). The Q&As provide a comparison of the Swiss standard with the client classification concepts under the EU's MiFID II regime.

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 - MiFID II_FinSA. Below are two Q&As from this product so you can see a sample of what you will get:

Samples of the Q&A

Does the FinSA distinguish between different client segments as MiFID II does?

Yes, according to art. 4(1), the FinSA distinguishes between

  • retail clients: clients who are not professional or institutional clients (art. 4(2) FinSA i.c.w. art. 4(4) FinSA);
  • professional clients: as under art. 4(3) FinSA; and
  • institutional clients: qualified and limited form of professional clients (art. 4(3)( a)-(d) FinSA and mentioned categories according to art. 4(4) FinSA.

FinSA’s client segmentation is derived from the distinction between qualified investor and non-qualified investors under the superseded CISA on the one hand and on the respective differentiations under MiFID II on the other.

Please note that also high-net-worth retail clients are considered retail client unless they declare an opt-out to a professional client (for further details please refer to the sub-topic Opt-in/Opt-out (forms)).  

Please note that even though the institutional client segment is described in art. 4(4) FinSA as a special kind of professional client, art. 4(1) FinSA clearly distinguishes between professional and institutional clients. For a clearer understanding, these FAQs will refer to the three client segments retail, professional and institutional clients.

In addition, please note that only the three mentioned categories exist in FinSA. Even though the revCISA is creating a separate category of opt-out professionals only for the purpose and limited to art. 120(4) revCISA i.c.w. art. 129a revCISO (for further details please refer to the topic revCISA & other amended Laws), for the purpose of FinSA, it needs to be highlighted that, if a retail client is opting-out he/she is fully considered as a professional client, i.e. there is no distinction between an opt-out professional and a per se professional client with regard to the rules of conduct (for further details please consult the FinSA consequences overview).

Can MiFID II client classification forms also be used for the FinSA client classification?

No, it is required by either regime that the client states that he wants to change his/her client classification status. Therefore, it is important that it is made clear for the client that his/her expression of will has to entail that:

  • the client is opting-out either under MiFID II and/or FinSA; and
  • which risks are entailed with the opting-out under each regime.

Therefore, it has to be established if the existing MiFID II clients want to opt-out under FinSA as well. This is e.g., possible with an additional FinSA opt-out form or a combined MiFID II/FinSA form for new clients.

Please note that it is mandatory under the Appendix II para. II.2. MiFID II that the application part and the risk disclosure part have to be on separate forms (both need to be signed), which is not required under FinSA.

 

Who needs it

The FinSA Q&A: Client Classification- MiFID II_FinSA 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 - MiFID II_FinSA gets rid of the need to research Swiss regulatory requirements regarding client classification and compare them with the MiFID II standard. 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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