Chronology 2017-2018



45th Ordinary General Assembly: FinTech Regulation and Perspectives

The 45th General Assembly concentrated on FinTech and latest developments in Switzerland and abroad. The chairman Franco Morra sees continued challenges for banks in Switzerland due to a decrease in profitability and opportunities arising from technology and new business models – FinTech. The vice-chair of the AFBS Kristine Braden suggests that the Swiss regulation be technology neutral, providing legal certainty and assuring proportionality. According to the guest speakers from Roland Berger, FinTech will develop on four key trends: population's digital affinity, regulation, technology, and the market environment with clients distrusting banks. They believe that banks can benefit from partnerships and cooperation with FinTech startups. Examples of Swiss and foreign banks' involvement conclude the presentations and open for discussions. The AFBS will follow up the topic with its members and present results in a year's time.

The Assembly elected two new members of the Board: Kristine Braden as vice-chair, Citibank NA Swiss Branches, und Peter Hinder, Deutsche Bank (Suisse) SA.


AFBS Conference: Risk Management Framework

The speaker presents the FINMA Circular 2017/1 and its implementation in small and medium sized foreign banks. Participants share the way they are implementing the prescriptions, challenges they encounter and solutions found. Discussions focus on the risk management framework and the means for reducing internal complexity. Clear definitions need to be contained in easy to understand policies. The internal controls system needs to establish clear reporting lines and a hierarchy of responsibility. Availability of documentation and regular updates to reflect the actual situation are key.

Walter Mathis, Deputy General Manager, Habib Bank AG, Zurich, and AFBS Representative in the SBA Commission of Financial Market Regulation and Accounting


When managing relations with clients domiciled in Russia, banks in Switzerland are challenged: they need to satisfy the expectations of clients from a different cultural environment by setting up adequate products and services. At the same time they need to assure that the products and services they offer their clients are fully compliant with the locally applicable rules in the realms of tax as well as supervisory law. Specialist advice is needed because business opportunities are vast.

Roi Lavi, Neil Herold, Sqope (Suisse) Sàrl; Cyril Troyanov, Alisa Burkhard, Altenburger Ltd. legal + tax


Rollout to Foreign Banks of the SAQ CWMA

Events in Zurich Geneva and Lugano present the new ISO compatible Certified Wealth Management Adviser CWMA programme. Client relationship managers with their own client book can obtain certification along internationally recognised standards. Examination is defined by the banks and its compatibility with the ISO standards is monitored by the Swiss Association of Quality. For the first time bankers in Switzerland have the possibility of measuring and ascertaining their competence and know how. It is the only examination which encompasses the assessment of the candidate's behaviour in a client meeting. The events present the solution, its regulatory context, testimonials from banks participating already and solutions by institutions with SAQ recognition.

Ronny Wallnöfer, Swiss Bankers' Assocaition; testimonials from Credit Suisse, Julius Bär & Co, UBS; presentations by Fitch Learning; Finnova AG; Kalaidos with Institut Supérieur de Formation Bancaire, Centro di Studi Bancari, Fachschule für Bankwirtschaft;


AFBS Conference: SIX as a regulatory services provider

Beyond vending data on financial products, SIX Financial Information enhances its offering by taking into account regulatory requirements applicable to specific financial products in certain jurisdictions. Its information services cover more than 60 European regulations, such as PRIIPS, IRS 871(m), Russia Sanctions and many more. Through centralised implementation and data publication SIX can offer economies of scale and safety to the banks. They can rely on up-to-date data issued by a trusted partner through a common source.

Mark Hembury, SIX Financial Information

AFBS Conference: stay rules

Resolution stay clauses are put in place to allow national regulators to suspend international contracts if the bank is in liquidation, thus contributing to assure successful restructuring. To assure application of such clauses, parties of international contracts need to recognise them. From 1.4.2018, all banks in Switzerland entering into international contracts will be held to agree to such clauses. The speakers present the theoretical and practical framework and discuss hot topics with the participants, such as tacit or explicit agreement.

Pascal Tanner, Nomura Bank (Switzerland) Ltd; Olivier Favre, LLM, Partner, Schellenberg Wittmer

AFBS Conference: Cyber Resilience

To follow up on the April meeting of the AFBS Group Cyber, a Conference takes place. The Zürich State Prosecutor explains that in fighting cyber crime new informal ways of investigating become necessary to stay up to pace with the offenders. Procedure of international legal assistance are often too lengthy. Perpetrators tend to avoid jurisdictions where they know that investigators act quickly. The speaker from Citi explains how a global bank is involved with public and private entities at an international level. He too confirms that informal channels and trust among participants are key for success. SIX speakers present the Security Operating Centre about to be set up; they outline the regulatory and technical infrastructure and explain the means of interaction they hope to establsih with private sector partners.

Stephan Walder, Staatsanwaltschaft II Kanton Zürich; Colin Wetherill, Citigroup Cyber Intelligence Centre London; Jochen Dürr, Thomas Rhomberg, SIX Group


AFBS Roundtable: Suitabilty as a Service: how can FinTech support banks

A joint event with a Geneva-based FinTech cluster presents to the audience the approach of three startups to implementing suitability requirements: first product suitability helps decide what product to offer which client; second, cross-border banking needs to take into account local regulation also at the client's place or residence; thirdly, the full chain of post trade execution needs to be implemented smoothly and safely. Short presentations are followed by a roundtable discussion.

Fintech Fusion Geneva and EdgeLab, indigita SA, NetGuardians SA

AFBS Conference: Treatment of Structures under the AEoI

Speakers from banks, trusts and foundations and from law firms discuss the difficulties and challenges arising for wealth management structures under the Common Reporting Standard. In particular, questions arise in relation to the extent of information to be provided, the means of identifying the entity in charge of collecting and transmitting the information and the liability of the different parties involved: custodian bank, management structure, adviser in charge of setting up the specific scheme. The event was co-hosted by the Centro di Studi Bancari and the Swiss Association of Trust Companies.

AFBS Conference: Automatic Exchange of Information (AEoI) The Transmission of Data

The speakers outline the technical specificities upon which financial intermediaries need to collect data and exchange it with the Swiss Federal Tax Aministration. Intermediaries need to make sure they correctly transpose the technical rules into their internal system and to get ready for the transfer. This may be particularly challenging since big volumes will have to be transferred. The speakers explained procedures governing registration, transfer and correction of data. The event was co-hosted by the Centro di Studi Bancari and the Swiss Association of Trust Companies.

Pascal Michel, Stefania Ferrari, Swiss Federal Tax Administration

AFBS Conference: Basel III & Liquidity: current regulatory issues and future developments

The speakers, foreign banks' representative in the Swiss national working group, update on the latest, rapidly evolving, developments regarding implemenation of Basel III. They focus on large risk exposure, expected credit loss, and disclosure for banks. They provide an outlook to future regulation such as the adjustments in liquidity regulation: LCR and NSFR and the revision of the regulation on the interest rate risk in the banking book.

Bernard Fishman, Bank Hapoalim (Suisse) SA; Remo Wäckerlin, Deutsche Bank (Suisse) SA

AFBS Roundtable: MiFID, PRIIPS, BIPS, …

A group of Geneva-based banks meets to assess challenges and discuss necessary measures to stay in line with the implementation of the revised MiFID and related EU regulation. Even though – at first sight – all regulations do not immediately target a bank in Switzerland, they may nevertheless apply due to the bank's products being used in the EU market or its operational infrastructure providing services to an EU-based intermediary.

Anouchka Zurita-Gallion, CA Indosuez (Suisse) SA

AFBS Conference: EU Regulation on Data Protection: What does this mean for a bank in Switzerland?

The speakers discuss the EU data protection regulation and its impact on a bank in Switzerland with connections to the EU. Exposure to the EU regime can be manifold such as through a parent or sister group entity or through clients resident in the EU. Understanding the exposure is important since the regulatory measures are extensive and penalties can be very high. Even though Switzerland plans to introduce similar regulation, special attention should be given to the EU regulation and its impact on the business in Switzerland. The speakers confirm that even in the EU firms are overwhelmed by the regulation; they recommend to assess the impact and start preparing a project for implementation at earliest.

Nicolas Vernaz, Yan Borboën, PricewaterhouseCoopers SA


AFBS Conference: RegTech

The oustourcing firm Swisscom extends its offering to banks and other financial intermediaries by assisting in keeping abreast and applying the increasingly complex regulatory requirements. The speakers outline the offering through sample cases showing the implementation of specific regulations. They also discuss the impact of the growing number of startups focussing on specific services and how the interfaces for their integration in an outsourcing platform can contribute to enhance services.

Dominik Witz, Luciano Donati, Swisscom Banking Services


SFS FinTech Lounge

The FinTech Lounge event offers participants a forum for insight and networking with experts from different backgrounds. Beyond an introduction into the present regulatory framework governing FinTech in Switzerland, individual market participants present their business model and how they evolve within the regulatory environment. Consultants conclude the event by outlining the key challenges ensuing from the changing environment and by discussing possible answers. The event ends with opportunities for networking and informal exchange.


AFBS Conference: Automatic Exchange of Information and other Tax Topics

The speaker presents the present state of implementation of the scheme of automatic exchange of information. He discusses with the audience several technical points related to client information, requests of clients to reconsider their classification, treatment of jurisdictions which mereley provide but do not want to collect information, deadlines for the transfer of data to the Swiss Federal Tax Administration and the need to take into consideration that their server may be difficult to reach towards the expiry of the deadline due to data overload. In addition, the speaker updates the audience on other relevant tax matters at international and national level, such as 871(m), OECD attempts to review the CRS standard prior to its final implementation, Swiss stamp duty tax.

Urs Kapalle, Swiss Bankers' Association.

AFBS Conference: Outsourcing – the step to compliance

The revised FINMA Circular Outsourcing enters into force on 1.4.2018; it offers a five year transition period for existing outsourcing agreements but becomes applicable with immediate effect if an existing agreement is amended. The increase in the bank's autonomy for determining the outsourcing setup goes with an increase in its responsibility. Specific activities relating to operational activities such as restructuring or processing need to be clearly circumscribed when outsourced abroad. The speaker addresses practical aspects of the Circular and their impact on the organisation such as inventory, outsourcing project, outsourcing and internal control, contracts with third parties.

Beatrice Bartelt, Mazars.


AFBS Conference: Value Added Tax – neutral or harmful to my business?

The Swiss Federal Tax Administration has increased its audit activities with banks in the realm of VAT. Even though banking services are exempt, many other banking activities are not; this leads to cost which can be minimised. The speakers discuss measures that allow banks to manage VAT exposure efficiently. They address VAT liability related to categories of banking fees; VAT and administrative services supplied to foreign-incorporated entities; procedures and conditions for recovery; implication on VAT from new Swiss and foreign regulation.

Niklaus Honauer, Marcella Dzienisik, Fabienne Boinnard, Gilles Widder, Paolo Pamini, PwC.

AFBS Roundtable: EU GDPR in Switzerland

The first meetings on implementation of the EU General Data Protection Regulation GDPR take place in Geneva, Zürich and Lugano. It is planned to meet regularly to allow the foreign banks to accompany progressively the implementation of the regulation in Switzerland. Even though the EU GDPR does not formally apply on Swiss soil, banks agree that they are exposed through their relations to the EU via their parent and/or group entities, clients domiciled in the EU or business partners. The requirements are extensive and a careful impact assessment and definition of processes and procedures is required.


AFBS Groups

Beyond the AFBS Conferences and AFBS Roundtables the Association manages an increasing number of topical working groups meeting at regular intervals to discuss current developments. Off-the-record discussions and trust among members thanks to longstanding participation allow the assessment in detail of various also sensitive issues. The AFBS Groups gather representatives of foreign banks on the following topics:

AFBS Group Lugano is a local group which discusses updates and regulatory developments on various subjects. The diversity of group membership allows addressing a wide variety of topics.

Ostschweizer Gruppe works in a similar way to the AFBS Group Lugano as it discusses various topics and their impact on the individual bank.

AFBS Group KMB allows small and middle-sized banks to gather for an informal exchange of views and experiences over lunch.

HR Zirkel Zürich invites experts to present hot topics and discuss them in-depth with the members. Continuous training was at the core of attention as well as the new regulation regarding registration of work time.

AFBS Group Retail GE meets twice a year to discuss key points on specific regulation and business environment for retail banks in Switzerland. The servicing of clients living in France and working in Switzerland is among the issues.

Juristenzirkel Zürich follows up on major changes in legislation and regulation and their impact on the banks' daily business. Invites experts from time to time to delve into specific topics and exchange views among banks.

AFBS Group Cyber was created in spring 2017 and gathers specialists of IT security of the major foreign banks to look into the possibilities of contributing to enhance cyber security in Switzerland.

AFBS Group CRS/FATCA ZH and GE: on the technical implementation of the FATCA regulation and the definition of the forthcoming common reporting standards governing the automatic information exchange.

AFBS Group Funds operates in parallel in Zürich and Geneva. Its members focus on the regulation aplicable to foreign fund representation and distribution in Switzerland. The groups liaises with the SFAMA through their representative in the latter's board.

CEO and CFO Lunches: In regular meetings, the President and local Board members invite CEOs for an exchange of views on current topics. Similarly, CFOs of different member banks meet to discuss issues of interest.



AFBS Roundtable: Cyber Intelligence

The AFBS Board decided to create an AFBS Group Cyber. The group gathers foreign banks' specialists in cyber security in view of sharing knowledge and enhancing cyber resilience. The first meeting helps to understand the infrastructure setup in Switzerland and possible involvement with the FINMA and MELANI, the government's Reporting and Analysis Centre for Information Assurance. The FINMA sees its role in monitoring regulatory compliance and acts whenever there is a breach of client data protection; it does not monitor and foster information exchange. The MELANI collects and shares information but exchanges only with Swiss systemically important institutions, which means that foreign banks are excluded. A participant from the State Secretariat for International Finance offers the possibility to liase with the government's initiatives and to raise the foreign banks' concerns.


IRS Regulation 871(m)

Representatives of the AFBS participate in the financial centre working group on the implementation of the IRS Regulation 871(m), which requires banks to calculate and disclose income on derivatives on US-assets. The regualtion is highly complex, its entry into force staggered. Many questions remain open even with the US authorities. A major risk arises from lack of data consistency. To minimise this risk, banks assess the possibility of creating a centralised data hub. SIX Group could act as such and assure that all financial intermediaries in Switzerland are using the same data.

AFBS Comments: Second round of agreements on Automatic Information Exchange

The AFBS comments on the proposal to ratify a second round of agreements on Automatic Information Exchange. It agrees that, the AIE being applied nearly globally, it will be difficult for Switzerland not to participate in exchange with specific countries such as Russia, Chile, Mexico, Turkey or China.


SAQ Certificate Wealth Management Adviser

The AFBS participates in the SBA initiative to obtain recognition of the SAQ certification by foreign supervisory authorities. Even though most financial centres apply person certification, the idea of an international standard is new. International recognition would benefit relationship managers as it would make transfers easier; it would also benefit international clients who could refer to a common standard. Banks, training institutions and the SAQ prepare submissions; the FINMA welcomes the initiative.

Fund Academy: Panel Standort Schweiz

The AFBS Secretariat moderates a panel on the two day Swiss Fund Forum. Discussions concentrate on the challenges and opportunities the Swiss fund centre faces in the realm of asset management and distribution of collective investment schemes. The restrictive EU regulation in the realm of market access poses additional burdens on distributors in Switzerland; the delegation of asset management capabilities to third countries such as Switzerland can only take place if it is compliant with the EU rules on substance in the place of incorporation of the scheme. Participants remain that Switzerland remains the place to be for setting up and distributing investment vehicles for special purposes and asset strategies. This thanks to the flexibility of the regulation and the presence of wealthy and sophisticated investors.

AFBS Board meets FINMA on FinTech

The FINMA assesses the need and type of regulation of FinTech. It wants to adopt a technology-neutral regulation and remove obstacles so as to ease business and promote innovation and at the same time assure pursuit of its core goals of investor protection, systemic stability and operational safety. When regulating, it will have to take into account international developments such as the introduction in the EU of the Payment Services Directive which admits the emergence of bank-independent payment platforms. The FINMA does not plan to offer a sandbox regime to innovators, because it does not want to select initiatives that may benefit from the regime and exclude others; it prefers leaving the market open through a licence-exempt area and to apply the same supervisory regime to all players. The emergence of non-banking financial infrastructure providers poses new challenges; the FINMA needs to assure that this development remains possible without it creating unexpected risks.


Chinese banks' visits in Switzerland

Several times throughout the year the AFBS Secretariat welcomes delegation of Chinese banks visiting Switzerland. They are interested to learn more about the Swiss financial centre, its regulatory environment and supervisory system, the business framework and opportunities for international development. The AFBS is a valued partner as it can present the system and focus on those aspects that are particularly important for a foreign bank in Switzerland.


AFBS Roundtable: FINMA Kleinbankensymposium

In preparation of the FINMA Kleinbankensymposium foreign banks meet to agree on common topics of interest and points of concern. Proportionality in the audit activity and coordination fo reporting obligations are two particularly burdensome aspects of the actual supervisory system. Also banks would welcome more transparency in FINMA communications to banks and auditors and more timely issuance of mandates for special audit activities. Such interventions impose a heavy burden on small firms; its impact could be lowered if there was sufficient advice to get organised. The input is collected and submitted to the FINMA prior to the meeting.

AFBS Secretariat moderates GAM 25 Years Anniversary

The celebration includes panel discussions about the current challenges and developments in asset management. A first discussion with GAM chief economist Larry Hathaway concentrates on the global environment, challenged by an increasing number of nationalistic tendencies. In a second round, regulatory questions and the impact of technology and FinTech are assessed with speakers from PwC Luxembourg and Switzerland. The third round compares means for achieving high performance by asset management teams and by sports teams.

AFBS Roundtable: Draft FINMA Anti-Money Laundering Ordinance

The foreign banks meet in roundtables to discuss the draft revision of the Ordinance and its impact on their daily business. The revision has become necessary upon the FATF peer review of Switzerland and includes amendments the FINMA identified in its supervisory activities. Based upon the discussions the AFBS Secretariat drafted comments to the consultation. Comments include the need to clarify that group-wide consolidated risk assessment can only take place at group level but not by an individual branch or subsidiary; the concern to assure equal AML and KYC duties to all wealth management entities rather than defining special rules for domiciliary companies; want of clear rules and transaparent information regarding the identification of high-risk jurisdictions.

Natacha Polli, PAZ Consultants SA; Christian Zuber, Deutsche Bank (Suisse) SA.


Meeting between SIX Group and the AFBS Board

A delegation of the AFBS Board met with the Chairman of the Board of SIX Group, Romeo Lacher, Soen MOse, Member of the Board, and ^member of the SIX Group’s management. The SIX Group outlined its financial situatin, the reorganisation, and the ongoing discussions of changing their image of “a stock exchange” to “a financial service provider”. In the meeting the possibility was discussed that SIX would offer to banks support and solutions in cybersecurity.

AFBS Comments: revision Anti-Money Laundering regulation

The AFBS Secretariat meets with member banks to discuss the revision of the Swiss anti-money laundering regulation and to prepare input to the consultation. The comments ask for confirmation that group-wide risks can only be managed at group, but not at branch level. They wish to prevent from excessively restrictive regulation of domiciliary companies, whose use can be justified for manifold reasons and should not be made excessively complex. Several other points of concern for the foreign banks are raised.

Suitability as Service – How can FinTech-solution support banks?

The event organised with the Geneva-based Fintech Fusion outlines in what way FintTech can support banks in their KYC and due diligence obligations. Thus speakers from three companies outline their approach to pre-trade and product suitability in view of compliance with the client risk profile; product suitabiltiy from a cross-border regulatory perspective; and suitability in the post-trade realm with respect to automated controls and follow-up of transactions.


4th Meeting of the European Foreign Banks Associations in Geneva

The meeting focuses on the impact for global financial services in a world of tightening borders. The event focused on the partnership between the EU and major financail centres on the continent which never did or decided no longer to belong to the common market. The EU Ambassador confirmed the EU's commitment to unconditional unity without offering special deals to some members or to third countries. Ambassador Weber, State Secretariat fro International Finance, recalled the strong support Switzerland had always given to the EU project, even though it is not a member. Representatives from the London financial centre prepare plans to become a hub for emerging economies beyond the European continent. They confirm that a partnership with Switzerland could also be envisaged.

Meeting between the SIF and the AFBS Board

Together with partners from Boston Consulting Group, the delegation of the AFBS Board discussed with SIF management representatives the trends in the Global Wealth Management business. The Swiss Financial Center, although strong in some of the most important non-European markets, will depend crucially on the development of wealth creation in the EU countries and on the possibility to serve these markets cross-border. Due to the much stronger growth of wealth creation in East Asia, the two leading regional financial centers may overtake Switzerland as pargest financial hub for cross-border managed wealth.


SBA media meeting in Geneva

The AFBS participates in the SBA media meeting in Geneva. The annual gathering offers the possibility to discuss various topics which impact the Swiss financial centre or specific banking groups. The meeting being in Geneva, international private wealth management issues are at the centre of the attention.


SBA Proportionality

The AFBS participates in the SBA working group Porportionality. This is a response to the FINMA inviting small and medium-sized banks to discuss possible simplifications in the regulatory and supervisory realms. The SBA wanted to assure all banking categories have their say and invited to discuss possible ways of ligthening the supervisory burden for large banks also. The initiative also aims at coordinating the banks' input ot the FINMA Kleinbankensymposium, thus strengthening cooperation.


FINMA: revision Circular Audit

The AFBS Board discusses the revision of the FINMA Circular audit with a representative of the audtiors. The revision should take into account the outcome of the ongoing initiatives introudcing more proportionality in the regulatory and supervisory activities. Also the Circular should not be revised on its own, but the initiative should be put in a global context in view of assuring coherence among the different elements of the supervisory structure. The dualistic audit system should be maintained, it is efficient and produces good results; several other small international financial centres such as Luxembourg and Singapore follow the same approach. To save cost, cooperation among the bank and its auditor should be admitted, pre-audits not prohibited in principle; intervals between audit activities should not be excessively long to assure continuity.


Meeting between the FINMA and the AFBS Board

The AFBS Board meets with representatives of the Board and the Secretariat of the FINMA. Even though the number of bank closures remains above the new openings, the AFBS could report an improvement of the mood among banks with repsect to preovious years. The foreign banks' diversified services offering and their global network benefits the Swiss economy as a whole as it eases the access of Switzerland's firms to the global markets. The FINMA welcomes the foreign banks involvement in FinTech developments and their interest to strengthen cyber security.

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