Implementation of FinSA and FinIA (part 2): a review of the current situation

Supervision by a supervisory organisation

To obtain FINMA authorisation, an asset manager or trustee must be affiliated with a supervisory organisation. It is currently assumed that most asset managers and trustees will begin submitting their applications in the second half of 2021. However, some of them have already done so.

Following authorisation by FINMA, the supervisory organisations will be responsible for regular supervision of the asset managers and trustees and ensuring compliance with the obligations under FinSA, FinIA and AMLA. In this set-up, FINMA’s role is limited to providing any identification and clarification of irregularities that may prove necessary in the course of enforcement proceedings.

Any entity wishing to act as a supervisory organisation must also be licensed by FINMA. Of the five supervisory organisations that have applied for licences, three have been approved:

  • Organisme de Surveillance des Instituts Financiers (OSIF), based in Geneva
  • Organisation de Surveillance Financière (OSFIN), based in Neuchâtel
  • Organisme de Surveillance pour Intermédiaires Financiers & Trustees (SO-FIT), currently being established in Geneva

Swiss German SOs – who’s next?

Interestingly enough, the three supervisory organisations (SOs) approved so far by FINMA are all located in French-speaking Switzerland, so authorisation of the first SOs from the German-speaking cantons is actually overdue. FINMA has received an application by AOOS, which was established by the Swiss Association of Asset Managers (SAAM), and it can be expected that further SOs will follow.

The ‘old’ SROs attach great importance to ensuring that their current members can be transferred seamlessly to the new SOs – depending on the SRO, this may happen more or less automatically and free of charge. It will be interesting to see how the SRO environment evolves among financial service providers that will remain subject to the AMLA without requiring FINMA authorisation or affiliation with an SO. Who will be left? And what will the standards look like?

Affiliation with ombudsman’s office as early as this year

Under FinSA/FinIA, all financial service providers who provide their services in Switzerland must also be affiliated with an ombudsman’s office. The first ombudsman’s offices were authorised by FINMA in June this year – in light of the six-month deadline, affiliation must therefore be completed by the end of 2020.