AFBS News November 2018
47th Ordinary General Assembly on 5 June 2019, Geneva
Legislation and Regulation – Domestic
Quantitative Impact Study on Basel III – FINMA invites for participation
The Swiss Authorities started the national implementation of the final Basel III standards, of which the timely execution of a Quantitative Impact Study is an important part. The FINMA, as well as the AFBS and the SBA, invited banks to participate. The QIS needs to be performed before end of March 2019.
Draft Ordinances on Financial Services and Financial Institutes
The Federal Council published the draft Ordinances on Financial Services and Financial Institutes and invites for comments until 6.2.2019. The main focus for foreign banks lies on gaps with MiFID II and unwarranted Swiss Finish, both in the Ordinances and in their various annexes. It further needs to be assured that the provisions do not put the foreign banks in a competitive disadvantage, be it to foreign financial service providers approaching clients based in Switzerland, be it to Swiss institutes whose foreign entities receive exemptions from registration and ombudsman duties when entering the Swiss market. Info: DE FR IT EN
The AFBS invited for Roundtables to discuss the draft Ordinances and collect input for AFBS Comments.
Information exchanged for the first time
End of September 2018 Switzerland exchanged for the first time data on approximately 2 mio financial accounts. The exchange occurred with the EU countries and nine more jurisdictions. Initially, France was unable to participate due to technical problems; it is said that these problems could be resolved and data exchanged. Cyprus and Romania were excluded as their data protection standards are not compatible. Info: DE FR IT EN
Revision of the Swiss Implementation of the Automatic Exchange of Information AEoI
During introduction of the AEoI the OECD standard had admitted the so-called white-list approach for a transitional period. It allows to apply simplified diligence duties also in relation with entities in countries that did not yet sign an agreement but had committed to doing so. This approach is no longer applicable from 1.1.2019; therefore Art 1 of the Swiss Ordinance is waived from that date. Info: DE FR IT EN
Based upon the G20 country report the Federal Council is preparing a revision of the Swiss regulation on AEoI. Main novelties are the abolition of exemptions for accounts of associations, foundations and co-ownerships; more stringent rules regarding capital payment accounts and shorter grace periods for obtaining missing documentation for identification. The consultation starts in February 2019.
Transfer of Data and Art 271 Penal Code
The Federal Department of Justice and Police declares that a transmission of data to a foreign competent authority in a case of breach according to the EU General Data Protection regulation does not constitute an offence to Art. 271 Swiss Penal Code. Info: DE FR IT
Interest Rate Benchmark
The UK Financial Conduct Authority confirms the end-date of LIBOR for end-2021. In Switzerland a working group with all relevant players established the "Swiss Average Rate Overnight" SARON as new benchmark in different segments of the interbank market. It also recommended the SARON as an alternative to the LIBOR and is defining technical details for the transition. Info: UK FCA: LINK
Federal Council on Gold Trading
The Federal Council publishes a report on the role of Switzerland in gold trading and human rights. Switzerland assures 40% of the world-wide refining capacity. The majority of gold originates in industrial mines; the Swiss legal framework prohibits trading in gold from illicit origin; Switzerland is in contact with international organisations in view of promoting human rights standards in the mining industry. The report recommends strengthening of stakeholder involvement; promoting implementation of the OECD standards and using blockchain for traceability. Info: DE FR IT EN
Legislation and Regulation – International
EU: Third Country Market Access
The EU is reviewing its financial services regulation. In this context it also plans to amend Art 46 MiFIR, which governs the third country access to EU-domiciled professional clients and eligible counterparties. There are controversial views on the proposal. Info EN and EN
IOSCO: Leverage by Investment Funds
The International Organisation of Security Commissions published for consultation a paper on leverage by investment funds. It shall assist national supervisory authorities in identifying funds that may pose a risk to financial stability and to measure it. Info: www.iosco.org and DOC
OECD: residence by investment
The OECD has become aware of new practices, which allow persons to avoid the automatic information exchange. Several countries offer residence by investment and citizenship by investment schemes. It publishes a list of jurisdictions offering such schemes. Further, a Q&A is available with guidance for financial intermediaries to more easily detect whether specific situations can potentially be a case of abusive behaviour. Info: LINK
The Federal Council continues its support of digitalisation of the federal administration by adopting the e-government strategy as proposed by "eGovernment Switzerland", the government agency for the promotion of digital services. Focus is on user experience, transparency and open architecture through common standards and interoperability. Info: Federal Council: DE FR IT EN and e-government: DE FR IT EN
Long Finance publishes three reports on smart ledger technology and the SmartJurisdictionsIndex listing countries and their framework for smart ledger technology. It assesses the countries' readiness and availability of infrastructure for the development of smart ledger and blockchain technology. Switzerland ranks 18th. Info link
AML-Standard for Cryptocurrency
The Capital Markets and Technology Association published a self-regulation, which serves as a guidance for the avoidance of money laundering in the treatment of digital assets by businesses and financial intermediaries. It also issued a blueprint on how to tokenize shares. Info ALM-Standards LINK – Tokenisation of shares LINK
End of membership: OpenFunds Investment Services AG (end of August 2018) - Bastions Partners Office SA (end of 2018) - Banque SYZ SA (end of 2018).
AFBS Roundtable: Crypto Currencies, ICO, Blockchain and Crypto Funds: J.Brzezek Crypto Broker AG; Zürich: 11.12.2018.
AFBS Roundtable: TRAFEC: Trade Finance Goes Digital: presentation of the digital platform for executing international trade and with testimonials from banks; Q&A: Geneva: 11.12.2018; Zürich: 13.12.2018.
Digitalised Banking: Fraud and Liability Risks: Zürich: 4.12.2018, P.Reichart Wartmann Merker; Geneva: 14.1.2019, P.Mouttet Mentha Avocats.
Trends in Human Capital: von Rundstedt & Partner Switzerland SA: Zürich: 16.1.2019 P.Scheiwiller; Geneva: 21.1.2019 A.Dagier-Joncourt; Lugano: 25.1.2019 M.Costantini.
AML in the CryptoCurrencies Business: L.Schlichting, Kellerhals-Carrard and Poseidon Group, and A.Ghislieri, Eidoo: Zürich: 22.1.2019; Geneva: 23.1.2019, Lugano: tbd.
CH - EU - UK: Cross-Border Banking at a Cross Roads: S.Hirsbrunner, Steptoe & Johnson LLP Brussels: Geneva: 28.1.2019; Zürich: 29.1.2019.
Cross-Border Services Provision to Italian Residents: L.Zitiello, Zitiello Associati Studio Legale, Milano; P. Altamura, G.Belgiojoso, Studio Colombo Altamura Pometto, Commercialisti, Milano: Lugano: 1.2.2019; Geneva: 6.2.2019; Zürich: 7.2.2019.
EU Commission contingency plan in view of the exit of the UK in March 2019: link
Switzerland ranks 38th in the World Bank's "Ease of Doing Business" statistics: LINK