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FinSA Q&A: Organization - Conflicts of Interest

FinSA Q&A: Organization - Conflicts of Interest

UBS Business Solutions AG

Date: October 14, 2021

This product consists of 22 Q&As on measures required in the context of conflicts of interest under the FinSA.

PV10262
$1,323.96

Author's Note

The product, a know-how collection entitled “ FinSA Q&A: Organization – Conflicts of Interest ” consists of 22 questions and answers (" Q&As ") developed by the UBS team of regulatory experts and provides you with the basis for understanding the general requirements of the FinSA as regards measures in the context of conflicts of interest. 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 Conflicts of Interest 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 conflicts of interest 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...

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The product, a know-how collection entitled “FinSA Q&A: Organization – Conflicts of Interest” consists of 22 questions and answers ("Q&As") developed by the UBS team of regulatory experts and provides you with the basis for understanding the general requirements of the FinSA as regards measures in the context of conflicts of interest.

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 Conflicts of Interest 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 conflicts of interest 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 Organization 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

What are the duties of a financial service provider with regard to organizational precautions?

Financial service providers shall take appropriate organizational measures to prevent conflicts of interest that could arise through the provision of financial services or any disadvantages for clients as a result of conflicts of interest. If disadvantages for clients cannot be excluded, this must be disclosed to them. 

According to art. 25 FinSA, a financial service provider needs to disclose to clients conflicts of interest, if a disadvantage resulting from this conflicts of interest cannot be excluded. This rule is already established in art. 14g Bank Ordinance (without further specification therein).

Art. 26 FinSO specifies this requirement by making clear that disclosure is a measure of last resort and determining the level of detail that is to be disclosed. The latter are namely the nature of the conflicts of interest, the risks resulting from it and the measures the financial service provider has taken in order to mitigate the risks.

What information needs to be provided in connection with retrocessions?

Both, civil law and public law foresee a cascade to be followed before disclosure. This cascade also applies to retrocessions as per art. 26 FinSA. As a consequence, if the financial service provider sufficiently manages the risks resulting from the retrocessions, the conflicts of interest wouldn’t need to be specifically disclosed.

However, in order to keep retrocessions, the financial service provider needs to inform clients about them and obtain a respective waiver. Independent from the disclosure rules described in question 1.3., we understand that such information will include some background on the nature of the conflict and the related risks, but not so much on the mitigating measures. This is in line with the requirements stated by the Swiss Federal Supreme Court. 

 

Who needs it

The FinSA Q&A: Organization – Conflicts of Interest 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: Organization – Conflicts of Interest 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.




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