FINMA Consults on Financial Institutions Ordinance and Other Proposals
FINMA published a consultation on the draft of a new Financial Institutions Ordinance (FinIO-FINMA), along with draft amendments to the current ordinances and circulars. FINMA published the consultation with respect to the necessary implementation of the Financial Services Act (FinSA), the Financial Institutions Act (FinIA), and the Federal Council’s implementing ordinances (Financial Services Ordinance or FinSO, Financial Institutions Ordinance or FinIO, and Supervisory Organisations Ordinance or SOO) at the FINMA level. The consultation closes on April 09, 2020.
The draft of new FINMA ordinance regulates the details of professional indemnity insurance for portfolio managers, trustees, and managers of collective assets, the details on calculating the de minimis threshold for gaining authorization as a portfolio manager, and the details on risk management and internal control system for managers of collective assets. FINMA also issued draft amendments to the current ordinances and circulars, including the following:
- As a result of the transfer of the provisions on managers of collective assets and fund managers to the FinIA, a number of adjustments to the Collective Investment Schemes Ordinance (CISO-FINMA) will be required.
- Due to the discontinuation of the directly subordinated financial intermediary (DSFI) status, the Anti-Money Laundering Ordinance (AMLO-FINMA) also had to be adjusted.
- Furthermore, minor adjustments had to be made to the FINMA Collective Investment Schemes Bankruptcy Ordinance (CISBO-FINMA), with formal adjustments required to the FINMA Banking Insolvency Ordinance (BIO-FINMA) and the FINMA Financial Market Infrastructure Ordinance (FMIO-FINMA).
- The scope of FINMA Circular 2013/8 titled “Market conduct rules” has been adjusted to include portfolio managers, trustees, and managers of pension assets who are now subject to a FINMA authorization obligation.
- In FINMA Circular 2018/3 titled “Outsourcing–banks and insurers,” the administrative practice in respect of FinIA institutions (with the exception of portfolio managers and trustees) is now being specified.
- Other adjustments of a fairly minor nature were also made to the circulars on liquidity risk (2015/2), credit risk (2017/7), and accounting (2020/1) for banks.
- Circulars on securities dealers (2008/5), repo or securities lending and borrowing (SLB) transactions (2010/2), and distribution of collective investment schemes (2013/9) are being rescinded, as these are being made unnecessary by the FinSA and the FinIA.
Additionally, FINMA proposed to amend the client identification threshold values in its AMLO-FINMA from CHF 5,000 to CHF 1,000 for exchange transactions in cryptocurrencies. Through these measures, FINMA is implementing the international standards approved in mid-2019 and acknowledging the heightened money-laundering risks in this area.
Related Links
- Press Release and Related Documents
- Key Points on Consultation (PDF)
- Draft FinIO-FINMA (PDF in German)
- Draft Amendments to FINMA Circulars (PDF in German)
Comment Due Date: April 09, 2020
Keywords: Europe, Switzerland, Banking, Securities, Insurance, Pensions, Proportionality, Credit Risk, Liquidity Risk, FINSA, FinIO-FINMA, Cryptocurrency, FINMA
Featured Experts
Karen Moss
Senior practitioner in asset and liability management (ALM) and liquidity risk who assists banking clients in advancing their treasury and balance sheet management objectives
Related Articles
PRA Finalizes Supervisory Approach for Non-Systemic Banks in UK
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
EBA Finalizes Standards on Methods of Prudential Consolidation
EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA Updates List of Other Systemically Important Institutions in EU
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS Report Concludes Basel Risk Categories Can Capture Climate Risks
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities Welcome FSB Review of their Remuneration Regime
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA Letter on Addressing Risks from Use of Deposit Aggregators
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA to Amend Banking Act and Rules in Coming Months to Transpose CRD5
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC Delegated Regulation on Specialized Lending Exposures Under CRR
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI Proposes to Enhance Assurance Expectations for Basel Returns
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB Issues Results of Benchmarking Analysis of Recovery Plans of Banks
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.
