FinSA, FinIA, FinSO, FinIO IAMs And Trustees Finally Authorized By FINMA

Author:Stéphanie Hodara El Bez and Cecilia Peregrina
Profession:Altenburger Ltd legal + tax
 
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At the end of October 2018, the Federal Council initiated the consultation procedure on the ordinances implementing the FinSA (draft FinSO) and the FinIA (draft FinIO). The final versions of these orders are expected to be adopted in November 2019.

One of the major changes brought about by these laws concerns independent asset managers (IAMs) and trustees, which will now have to be authorized by FINMA and will be supervised by a supervisory organization (SO). FINMA will authorize and supervise the SOs, which may request authorization as soon as the laws come into force. Several self-regulatory organizations (SROs) have already come forward to announce the creation of entities that will file such a request (Chapter 1).

In addition, the FinSA provides for new obligations in terms of conduct and organization, which affect in particular the IAMs (Chapter 2)

  1. FINMA AUTHORIZATION FOR IAMS AND TRUSTEES

    1.1. Players affected by the new FINMA authorization for IAMs and trustees as foreseen by the FinIA

    First, the IAMs are affected by this new FINMA authorization. The FinIA does not use the terms external asset managers or independent asset managers, but refers to them as "portfolio managers" 1 and describes them as follows: "A portfolio manager is a person mandated to manage assets on a commercial basis in the name of and on behalf of clients" 2.

    Thus, if an IAM has the power to dispose of its clients' assets, then the FinIA is applicable to it. To the contrary, for example, a company that provides investment advice but cannot dispose of its clients' assets, particularly if it does not have power over their bank accounts, should in principle not be subject to the FINMA authorization. If this company thus only exercises a mere advisory activity, it must nevertheless comply with the code of conduct of the FinSA, including in particular the obligation to obtain the registration of its client advisors (individuals) in the register of advisors (see 1.2. Register of advisors below).

    Secondly, the trustees will have to obtain a FINMA authorization. They are defined as follows: "Who on a commercial basis manages or disposes of a separate fund for the benefit of the beneficiaries or for a specified purpose based on the instrument creating a trust".

    1.2. Register of advisors

    Companies offering financial services or financial instruments, which are however not subject to FINMA authorization under the FinIA will still be required to comply with the rules of...

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