Swiss Asset Management Takes a New Turn in 2020

Anonymous — Wed, 13 May 2020 20:20:58 +0000

Swiss Asset Management Takes a New Turn in 2020 Anonymous Wed, 05/13/2020 - 22:20

From January 1, 2020. The Swiss Financial Institutions Act (FinIA) and the Swiss Financial Services Act (FinSA) entered into force, updating the regulatory regime for trustees working in Switzerland. This means that all independent portfolio managers (PMs) and trustees subject to supervision under FinIA will have to be supervised by a Supervised organisations (SO) authorised by FINMA and get licensed by FINMA before they can be able to carry out their activities as financial intermediaries in Switzerland.

The new regime is intended to strengthen the overall reputation and competitiveness of Switzerland as a financial centre, at the same time improving the quality, integrity and accountability of the Swiss trust industry. A particularly important point of innovation is the inclusion of trustees in the concept of “financial institutions.”

How it was before and what changes?

Previously known as asset managers, portfolio managers were required to comply with anti-money laundering (AML) regulations and be affiliated with a self-regulatory organization (SRO) in order to oversee compliance with AML requirements and industry standards. However, they operated without a license and no supervision from the Swiss Financial Market Authority (FINMA).

However, according to the new ammendments, asset managers that fall within the scope of FinIA activities will be subject to regulatory oversight must be authorized to carry out their activities in addition to meeting the structural, organizational, business and audit requirements. It's only after obtaining such a license that the asset managers will be able to register with the Commercial Register and get off the ground.

How the new law defines portfolio manager and trustee

A portfolio manager is a person mandated to manage assets on a commercial basis in the name of and on behalf of clients, and may dispose of clients' assets in any other manner (Art. 17 FinIA). Portfolio managers manage individual portfolios.

Thus, according to the law, the asset manager is based on two criteria:

(i) the power of disposal over assets of clients and

(ii) the commercial nature.

The authority to dispose of the assets must result from a corresponding order of the customer. This refers to a management mandate granted to the financial service provider.

The second criteria is commerciality according to FinIA is fulfilled if a financial service provider either:

- Has a gross income of more than CHF 50'000 per year;

- Maintains a business relationship with more than 20 contracting parties per year or 20 contracting parties which are not limited to a single activity; or

- Possesses power of disposal over third-party assets of more than CHF 5 million.

Any financial services provider who meets the two criteria (power of disposal over client assets as well as professionalism), qualifies in principle as an asset manager pursuant to Art. 17 para. 1 FinIA and is therefore considered a financial institution.

Asset managers are also considered as managers of collective assets. They manage the assets of collective investment schemes or occupational pension schemes below the defined thresholds (see Art. 24 para. 2 FinIA) and are deemed to be portfolio managers.

Initially business activities as trustees were not previously regulated, apart from the AMLA provisions which had to be observed.

A trustee is a person who on a commercial basis manages or disposes of a separate fund for the benefit of a beneficiary or for a specified purpose based on a restricted grant given namely in the instrument creating a trust. All this should be in accordance with the Hague Convention of 1 July 1985 on the Law Applicable to Trusts and Their Recognition. The trustee manages the separate fund, and ensures its value is maintained and employed in a restricted manner.

The second relevant criterion, the professionalism, is basically the same as that for the asset manager only if, with regard to Business volume the threshold values according to FinIA are achieved. The amount of assets under management, do not constitute third-party property under civil law.

According to the the Hague Trust Convention, foreign trusts are legally recognized in Switzerland.

MAIN DEADLINES

Other deadlines and obligations:

Financial institutions must affiliate to an ombudsman's office within six months of the Federal Department of Finance recognizing or establishing for them an ombudsman`s office in accordance with Article 84 FinSA.
During one year after approval of SO by FINMA, PMs and trustees starting activity during 2020 to affiliate with SO and file a licensing application with FINMA according to Article 74(3) FinIA. They can continue to operate until a decision is reached regarding their authorisation—provided that they are affiliated to an SRO, as defined in Article 24 AMLA, and are supervised by this SRO in relation to compliance with the relevant requirements.

How to get authorisation?

FINMA has opened a new online instrument to fulfil the authorisation requirements. Supervised institutions and their audit firms as well as supervisory organisations can use the web-based survey and application platform (EHP) to submit encrypted supervisory data and authorisation applications to FINMA electronically.

The FINMA portal is the central entry point for using the survey and application platform. To access the FINMA portal, users from the institutions must first register. After registering successfully, users can log in to the FINMA portal with two-factor authentication. The institutions must provide FINMA with the name of at least one authorisation coordinator before they can use the platform. This person may authorize other people from the institution to use EHP.

User guides are available to view on the FINMA’s website.

Conclusion

The new legal framework for financial institutions represents a new legislative age for trustees working in Switzerland and thus creates new steps of authorization in the field of regulation and administration. The good news is that that these procedures will lead to new opportunities that will take the Swiss trust industry to a whole new level.

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Import and export in Switzerland

Anonymous — Wed, 05 Jul 2017 04:10:53 +0000

Import and export in Switzerland Anonymous Wed, 07/05/2017 - 06:10

Swiss economic structure is characterized by a pronounced orientation towards international trade in goods and services as well as on cross-border investment activities, besides the banking and pharmaceutical industries.
According to the World Economic Forum’s (WEF) 2015-16 Global Competitiveness Index, Switzerland is the world’s most competitive economy for the seventh year consecutively, this due to its low tariffs on manufactures and absence of quantitative restrictions.
The 15th largest export economy in the world and the 2nd most complex economy according to the Economic Complexity Index (ECI), Switzerland has exported only in 2015 $279B and imported $261B, resulting in a positive trade balance of $17.5B.

Swiss trading
Switzerland is member of World Trade Organization. Also, though is not member of European Union, Switzerland has close ties with EU compared to other non-European Economic Area Countries, through Free Trade Agreement from 1972. Switzerland currently has a network of 28 free trade agreements (FTAs) with 38 partners outside the EU.
Switzerland has a small domestic market and limited resources, which makes the nation reliant on imports. Key Switzerland import commodities are:
·         Chemicals
·         Metals
·         Agricultural products
·         Textiles
·         Machinery

Switzerland major trade partners are: Germany, US, Italy and France.
Here, it is important to mention the existence of The Swiss Trading & Shipping Association (STSA), a non-profit, non-political Swiss association representing companies active in commodity trading and shipping activities, trade finance and related services. Since its creation in 2014 it acts as the umbrella organization for the sector in Switzerland, bringing together 3 regional associations (Geneva Trading and Shipping Association, Lugano Commodity Trading Association, Zug Commodity Association), 190 members and institutions, and over 100 professionals participating in STSA Committees and expert Working Groups.

Switzerland exports

Exports from Switzerland amounted to US$303.1 billion only in 2016. Year over year Swiss exports increased in value by 3.8%. Switzerland’s top 10 exports accounted for 87.3% of the overall value of its global shipments. According to the International Monetary Fund’s World Economic Outlook Database, Switzerland’s total Gross Domestic Product as of October 2016 was in a total amount of $494.3 billion, the exports accounting for about 61.3% of total Swiss economic value.

The top exports of Switzerland are Gold ($65.3B), Packaged Medicaments ($31.9B), Human or Animal Blood ($18.1B), Base Metal Watches ($13.3B) and Precious Metal Watches ($8.66B), using the 1992 revision of the HS (Harmonized System) classification.

Switzerland imports

Key products imported by Switzerland in 2015 were amounting $261B, making it the 17th largest importer in the world. With any average of 4% annual increase the Swiss imports developed from $210B in 2010 to $261B in 2015. The most important imports are in Gold which represent 27.7% of the total imports of Switzerland, followed by Packaged Medicaments, which account for 5.36%. Switzerland’s mineral resources are limited and although Switzerland is a manufacturer of agricultural products, the country still relies on imported products to satisfy the commercial demand.

With highly positive net exports in the international trade of pharmaceuticals, Switzerland’s strong competitive advantages under the drugs and medicines product category should be taken into consideration when thinking to form a company in Swiss trading field. Other domains to invest into are also the watches and jewelry, optical, technical, medical apparatus, organic chemicals, machinery including computers and perfumes, cosmetics.

Company Formation

Swiss Asset Management Takes a New Turn in 2020

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Import and export in Switzerland

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