• FinSA introduces significant changes that will affect all financial service providers who purchase, sell or distribute financial instruments for Swiss clients
• The MiFID II standard fulfills more or less the requirements under FinSA with respect to some duties
• There will be a fine of up to $502,400 (CHF 500,000) for non-compliance with the obligations or the unlawful distribution of financial instruments

The provision of cross-border financial services by Asian financial service providers, as well as the creation of financial instruments for the Swiss market, will be regulated comprehensively by the new Swiss Financial Services Act (FinSA), which is expected to be enforced on 1 January 2020. The new duties include information, documentation, behavioral, interest-related and organisational obligations as well as the obligation to enter involved client advisors into a client advisor register and to affiliate with the Swiss Ombudsman for financial services.

The new FinSA introduces significant changes. In principle, this affects all financial service providers who purchase, sell or distribute financial instruments for Swiss clients, receive or transmit orders related to financial instruments, provide asset management or investment advice and grant loans to finance transactions with financial instruments.

FinSA’s scope of application covers fewer activities than intended for under Markets in Financial Instruments Directive (MiFID) II, while other credit transactions are generally not covered. The advice of companies on capital structure, sector-specific strategy and related matters as well as advice and services relating to mergers and acquisitions of companies are generally not affected.

Swiss clients are segmented into private clients, professional clients and institutional clients, and they can generally change their client category on request.

The applicable obligations for clien...