Chronology 2015-2016



43rd Ordinary General Assembly The General Assembly focused on the strategic outlook for the Swiss financial centre. In a keynote Ambassador R.Balzaretti confirms that Switzerland needs to find a solution to renew its relations with the EU. The compatible implementation of the initiative against mass immigration and the definition of institutional cooperation with the EU are key pillars. Hoping for gaining market access is futile as long as these two key points are not resolved. The AFBS President, F.Morra, shows reassuring figures on the banking industry: assets are growing and banks employ more than 100,000. He predicts that the automatic information exchange will bring a change of paradigm for private banking Swiss style but is confident that this will benefit the financial centre which participates in shaping the international standards. F.Wenger, McKinsey, insists on the importance of the Swiss financial centre and identifies three major challenges: strong growth in other parts of the world; disintermediation of the profusion of financial services; decreasing margins. He recommends banks to strengthen their associations, which should speak with one voice, be more focused, cope with complexity and think ahead rather than about the past. R.Balzaretti, Head of the Swiss Mission to the EU, Brussels; F.Wenger, Mc Kinsey & Company; F.Morra, HSBC Private Bank (Suisse) SA, President of the Association of Foreign Banks in Switzerland.

AFBS Conference: Sanctions International financing business becomes increasingly complex, also with respect to the different, sometimes even conflicting, sanctions regimes. Major programmes to be taken into consideration by trade financing banks are those of the USA, the EU, Switzerland as well as major international organisations such as the UN. The lawyers from the USA and the EU outline the respective programmes, their scope in the cross-border context and the potential risks and vulnerabilities for banks. Special challenges arise from the fact that, due to the US-nexus of some transactions, they cannot be performed even if none of the contracting parties is established in the USA. Banks in particular need to be aware of secondary sanctions under the US-regime, which target financial institutions. E.Krauland, Steptoe Washington D.C.; G.Soussan, Steptoe Brussels.

AFBS Conference: Tax Regularisation in Latin America Several Latin American countries are among the "early adopters" of the OECD Common Reporting Standard aiming at the introduction of the automatic information exchange. Switzerland committed to the scheme and agrees to negotiate bilateral agreements on the exchange of information if the partner country offers its taxpayers the possibility to regularise assets held abroad. Some Latin American countries have a regularisation programme running, others are preparing one. The speakers give an overview of the state of play and discuss general considerations with respect to exchange of information and Latin American clients' reluctance towards the new standard for fear of reprisals and threats against physical safety. Banks in Switzerland are concerned by the fact that many clients transfer assets to the USA which does not participate in the CRS. J.Moreira, K.Maziul, Broseta, Madrid and Zürich; A.Keller, R.Eduah, Noveras AG, Zürich.


Diving into the Common Reporting Standard CRS The standard is coming but we do not yet know what it is going to look like in detail. The AFBS Conference offers a better understanding of the connections between standard, memorandum of understanding and the necessary bilateral agreements in view of making the exchange of information become effective. The speaker also delves into technical details with respect to Swiss implementation, due diligence on the identification of the persons / taxpayers, special situations such as trusts and foundations and the mechanism of exchange: when what information is shared with whom. C.Chammartin, Head of Section Exchange of Information and Individual Taxation, Federal Department of Finance FDF, State Secretariat for International Financial Matters SIF

AFBS Roundtable: Peace With Germany, What Peace? Although the two countries did not ratify the Rubik agreement on final withholding tax, they ratified an agreement on market access and cross-border financial services provision, which entered into force on 1.1.2015. The agreement offers banks in Switzerland a simplified procedure in view of being authorised to provide cross-border financial services – under condition the bank aligns to local consumer protection and anti-money laundering standards. The agreement also offers notification instead of approval for foreign funds to be distributed in the partner country. K.-U.Steck, Heuking Kühn Lüer Wojtek Partnerschaft von Rechtsanwälten, Zürich

AFBS Roundtable: Tax Regularisation in Latin America Following up on its conference on the situation on tax regularisation in Latin America the Association organised AFBS Roundtables to discuss the concrete impacts on banks in Switzerland and the reaction of clients resident in Latin America. It became apparent that paying the tax dues was of lesser concern to these persons than the physical integrity. Many residents consider potential exchange of information – automatic or upon request – as a reason for transferring assets, restructuring their holdings or changing residence altogether. AFBS Secretariat and representatives of member banks.


AFBS Roundtable: Italian Voluntary Disclosure Programme The AFBS organises meetings to discuss the implementation of the Italian voluntary disclosure programme which allows taxpayers to regularise their undeclared assets held abroad. Banks exchange views on how to prepare clients, to collect and aggregate account information and to accompany the client in the process. Questions arise with respect to the client waiver levying banking secrecy and allowing the bank to respond to information requests issued directly by the Italian authorities. AFBS Secretariat and representatives of member banks.


The CDB16 and Comments – on some tricky aspects The revised Convention on Due Diligence for Banks CDB enters into force on 1 January 2016, three years later than planned and after exhaustive review in order to be aligned to the revised FATF standards and the Swiss anti-money laundering law. It contains new rules regarding the client identification process, especially through the introduction of the "controlling person". It also introduces new forms which help clarifying certain specific situations. N.Polli, PAZ Consulting and K.Valenzano-Rossi, WalderWyss

MROS Reporting – viewed from the MROS The profound overhaul of the Swiss anti-money laundering regulation encompasses the extension of reporting duties to the Money Laundering Reporting Office MROS. The notion of tax offence as predicate offence to money laundering has been introduced. Is considered as such a situation where the person uses forgery / false declaration and elicits tax in excess of CHF 300,000 per year. There are no indications on how such a situation should be identified, especially in the case of a foreign resident. Beyond a presentation of the new framework, the event offered the opportunity to raise questions regarding its practical implementation. Many remained open. S.Ordolli, A.Beuret, Money Laundering Reporting Office


Trading Under the New Financial Market Infrastructure Law: Derivatives, Reporting Obligations, and More With the introduction of the financial market infrastructure law the reporting obligations are considerably enhanced. Especially transactions in derivatives need to be cleared by a central counterparty and reported to a transaction registry. The speaker explained exceptions and clarified the reporting obligations and related responsibilities. The meeting left room for discussing in detail the individual processes and procedures. The cross-border context and compliance with differing regulatory and disclosure rules raised interest. M.Liebi, PricewaterhouseCoopers.

Documentation of Work Time: New Regulation Employers, employees and the government finally met an agreement on the new regulation on the documentation of work time. The law requires employers to log duration and placement of the employees' work time; however, this requirement is no longer realistic in the modern world of flexible work patterns. The parties agreed to offer a new interpretation which waives the reporting obligation for persons with pay beyond a threshold and who have a large autonomy on their work time. A simplified regime is available for persons with autonomy on their work time, provided this has been agreed upon in a special agreement. B.Stückelberger, Employers Association of Banks in Switzerland


AFBS Roundtable: Forms A-I-K-S-T and the Controlling Person As outlined in an AFBS Conference, important novelties were introduced by the revised Convention on Due Diligence for Banks CDB 16. Banks are particularly concerned by the new rules governing the identification of the controlling person, especially in case of complex investment vehicles. The revised and new forms were a second topic that led to numerous questions by the banks. The Roundtable allowed banks to measure their approach and to compare it with peers, find answers to open questions and contribute with solutions to pending issues. AFBS Secretariat and representatives of member banks.


AFBS Roundtable: fiscal offences as predicate offence to money laundering The revised anti-money laundering law defines as predicate offence to money laundering situations where the client commits a tax offence in excess of CHF 300,000. Banks are concerned by the obligation imposed upon them because it is highly complex if not impossible to identify such situations, in particular with respect to indirect tax. Becoming aware of the exact amount of tax a foreign-resident client has to pay is nearly impossible because the bank cannot be aware of each client's specific tax situation and possible special status in place. The group concludes that the bank's duty resides with the definition of processes and procedures, drafting of clear internal guidance, and the training of employees in view of creating awareness. AFBS Secretariat and representatives of member banks.

CRS Guidelines – strategy working group The foreign banks participate in the drafting of the Swiss guidelines implementing the common reporting standards. A group of interested banks is constituted; in order to improve efficient workflows, the group merges with the already existing Geneva-based group coordinated by the Private Bankers' Association. It becomes a joint group gathering representatives of the three groups of wealth management banks and provides input to the Swiss Federal Department of Finance. AFBS Secretariat and representatives of member banks.


Brazil: Voluntary Disclosure Programme The Brazilian Parliament adopted a voluntary disclosure programme which allows taxpayers to regularise their undeclared assets held abroad. The programme covers assets held abroad as of 31.12.2014 and imposes fines for not having paid income tax and for not having declared the assets. Questions arise among the audience with respect to the clients' foremost concern of data protection and ensuing protection of the individual's personal integrity. This being the major concern in Latin America, clients wanting to prevent exchange tend to transfer the place of custody of the assets or to expatriate. S.Vilela, Bravest; R.Müller, Brasilregistros.

AFBS Roundtable: Draft FINMA Circular 2016/x Corporate Governance – Banks The FINMA drafts a new Circular Corporate Governance which integrates the existing Circulars Supervision and Internal Control and Operational Risks. The new Circular furthermore contains rules on remuneration and recommendations from the Basel Committee on Banking Supervision regarding corporate governance. The AFBS Roundtable allows discussion of the individual regulation's impact on the bank internal organisation, processes and procedures. It focuses on the expectations vis-à-vis the Board and General Management, risk management principles, compliance and internal audit, risk identification and mitigation, governance and incentive structure. AFBS Secretariat and representatives of member banks.

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:

Capital Markets is a newly-founded group aiming at looking into a different but not less important dimension of the Swiss financial centre. The presence, even if small, of global players in that realm is a key asset of Switzerland.

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.

AFBS Group Funds operates in parallel in Zürich and Geneva. It allows member to discuss points of concern under a clearly circumscribed focus of the foreign fund representation and distribution in Switzerland. The groups liaises with the SFAMA through their representative in the latter's board.

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 Rep QI Funds: new entities discussing the market standards for their business and the added value the newly introduced representative for qualified investor funds can offer business, investors and the supervisor.

Trade Finance Geneva: presently focussing on the development of sanctions regimes vis-à-vis Iran and Cuba and its impact on the business opportunities for banks 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.



SBA Seminar comparing the draft financial services law with the MiFID II The AFBS Secretariat moderates the SBA seminar on the comparison between the Swiss draft legislation on financial services and financial institutes with respect to the EU MiFID II regulation. Speakers conclude that some measures need to be implemented in Switzerland, especially with respect to prudential supervision of external wealth managers, transparency on fees and incentives towards clients. These are necessary both to assure equivalence and to respond to the concerns the FINMA expressed already in its papers on distribution of 2010 and 2012. Also there should be alignment in the realms of investor categorisation and rules governing suitability and appropriateness, especially for the sake of coherence of regulation. Financial services providers in Switzerland need to bear in mind that when offering services to EU private persons, the local consumer protection rules apply.

Meeting of Swiss Bankers with the OECD The AFBS Secretariat participated in the delegation of the Swiss Bankers’ Association with the OECD. Discussions focussed on the progresses of the Automatic Information Exchange. The Swiss delegation expressed its concerns that the system will not develop in a network of bilateral agreements. There is a risk that most countries contain themselves to exchange information with the same few financial centres. The OECD assured that it has all interest that the system will be globally, and not only selectively, applied. It is also aware that reciprocity is not only a matter of agreements, but that the notion extends to the quality of data. The OECD points out that peer reviews should assure that all countries apply the system according to the rules set out in the standards.

Swiss International Finance Forum The AFBS Secretariat participates in a panel on international opportunities for the Swiss financial centre. The panellists discuss the difficulties banks face due to the lack of market access. J. de Watteville confirms that it does not look easy for Switzerland to obtain third country market access in the EU. For a bank headquartered in Switzerland, local presence in the foreign target markets may become inevitable. Beyond market access to foreign countries the Swiss financial centre also needs to make it attractive for foreign financial firms which bring important benefits to the Swiss economy. Thanks to their global presence, globally networked banks facilitate the Swiss industry firms' access to markets across the world, also in emerging economies.


China Delegation The Secretariat receives a delegation of Chinese bankers visiting Switzerland. The bankers are interested in the functioning of a globally connected financial centre, the role foreign banks play in Switzerland, the contribution banking plays for the global national economy and the benefit the industry and general economy can draw from a strong financial centre. The Swiss dual training model also attracts much interest.


Board Meeting in London The Meeting allows an exchange of views on topics of interest to the London and Switzerland financial centres: M.Yeandle presents the methodology of the Global Financial Centres Index whose results, based upon peer reviews, can help financial centres improve their positioning. Switzerland should give the index more attention. R.Huo, HSBC, explains how London managed to establish itself as a premier hub for RMB transactions outside of China. Switzerland also is a globally connected financial centre and therefore interesting partner for China. J.Krol, Alternative Asset Management Industry, shows the impact regulation has had on the alternative asset management industry and confirms the potential Switzerland has for the distribution of such products. E.Wandel and J.Pope, Financial Conduct Authority FCA, introduce the "sophisticated client" concept in the UK law, which offers wealthy clients an easy access to sophisticated and alternative investment products. Ph.Hildebrand, BlackRock, is optimistic about the Swiss financial centre. He recommends focusing on operational excellence where Switzerland has an advantage with respect to other places.

Meeting among the European Foreign Banks' Associations The representatives of the foreign banks associations meet in Frankfurt for their annual update and exchange of views on regulatory developments. Being in Frankfurt they take the opportunity for a discussion with representatives of the European Central Bank (ECB) and BaFIN, the German supervisor. The ECB reports that the pan-European supervisory mechanism has taken off well. The new supervisory entity has recruited the necessary staff and is positive that the relation with the national authorities can be readily defined. The BaFIN representative gave an overview on the MiFID implementation in Germany.

Swiss Bankers' Day – Panel on market opportunities with China The AFBS Secretariat moderates a panel on the Swiss Bankers' Day discussing challenges and opportunities from strengthened relations between Switzerland and China. The panellists cover both the realms of wealth and asset management, where they identify huge opportunities for diversification and return, but also see considerable risk due to the market being very new. They also cover the corporate banking side, where Switzerland's economy and enterprises largely benefit from the presence of global banks. Only those banks are in a position to respond to the needs of a global firm, which needs cash and liquidity management all over the world but enjoys being able to coordinate the transactions at its headquarters in Switzerland.

Focus Group: Trade Finance and Speculation The AFBS Secretariat assists in a focus group discussion on the young socialists' initiative against speculation with foodstuff. The discussants both from left and right have sympathy for the initiative; they estimate that Switzerland should play a leading role in fighting speculation and can afford some loss of business activity.
The Secretariat contributes to creating an interest group fighting the initiative by gathering Swiss business associations with Geneva-based traders and trade financing banks in view of forming an interest group responding to the young socialists' arguments.


Kapitalmarktforum Zürich The AFBS Secretariat moderates the half-day forum which deals with tax issues – especially the corporate tax reform – and opportunities for the asset management business in Switzerland. In his keynote National Councillor Ruedi Noser expresses his optimism for the Swiss banking and workplace and identifies numerous areas where the two could more strongly join forces. An asset manager explains to the audience the synergies that arise between a trading company and an asset management firm – they are in the interest of both the investor and the trader. The panel with speakers from Malta, Frankfurt and Switzerland discusses the opportunities that stronger cooperation among these – and other – financial centres could offer.

Geneva Roundtable on Sino-Swiss Synergies The AFBS Secretariat moderates the one day seminar co-organised by the Geneva Chamber of Commerce, the Graduate Institute and the AFBS. Speakers from banking, academia, China and Switzerland speak about the potential that the Chinese economy offers and the opportunities that cooperation between China and Switzerland contains. A banker outlines the excellence of the Swiss financial services that originates in the fact that many global firms established their finance quarters in Switzerland and helped developing skills in treasury and cash management. Now it is time for the financial centre to make these skills available to new entrants, such as firms and banks from emerging economies.


Meeting between the State Secretariat for International Finance and the AFBS Board delegation A delegation of the Board met with State Secretariat de Watteville and members of the SIF. The State Secretariat pointed out that a necessary condition for market access and improved competitiveness and attractiveness is to pass the Global Forum’s Peer Review. The Board delegation was informed on the issues which are likely to be at the centre of the review and on the review process. The highly political character of the review became apparent. Moreover, the reviews are extremely formal; the Swiss principle based approach is, if understood, not appreciated.

Panel Participation: A quoi s’engage la Suisse en matière d’échange automatique d’informations? The AFBS Secretariat participates in a panel discussion on the impact the forthcoming exchange of information has on the Swiss financial centre. The AFBS is particularly well-placed to speak about this topic in Switzerland since the majority of its member banks are headquartered in an early-adopter country which needs to be ready for the scheme by 1 January 2017 already, starting to collect data from 1 January 2016 which is to be exchanged in 2017. Challenges are major both with respect to technical implementation of the processes and procedures and with respect to informing and preparing clients.

Meeting among the Boards of SIX Group and the AFBS A delegation of the Board met with the Chairman of the SIX Board and a representative of the Board, the SIX’s CEO and a member of the management. SIX presented its current economic situation, but also its visions on how to position itself in a business context in which size matters everyday more. The SIX representatives are convinced that by offering centralised services, they can add value to the financial centre and develop a viable business strategy.


Swiss Ambassador to Iran at the Geneva Chamber of Commerce The AFBS Secretariat participates in a roundtable with the Swiss Ambassador to Iran who presents the state of play and allows for a discussion among industry representatives from both Switzerland and Iran. The aim of the meeting is to identify areas of common interest and discuss possible thrusts of cooperation. The sanctions, especially those imposed by the USA, continue to be a major obstacle to the full development of trade, since they introduce a major element of insecurity into trade relations. Geneva wishes to develop the long-standing relations with one of the major economic players of the Near East. This would offer interesting opportunities for economic development both for Iran and for Switzerland, especially in the realms of trade and corporate finance.


Board Meeting with the SBA Chairman Patrick Odier explains the new positioning of the SBA. The Association wants to be involved at an early stage in the development of relevant regulation and push the cost-benefit assessment of such initiatives. It aims at assuring that the banking industry can again speak in one voice, as it did during the first hearings on the Financial Services Law. The SBA also wants to outline the dysfunctionings of regulation and supervision and therefore invites banks to raise the voice when they experience dysfunctionings with the administration. It wishes to establish itself as voice of the industry in view of creating a business-friendly market environment.


Meeting between the FINMA and the AFBS Board The newly elected president Thomas Bauer showed interest towards the positions expressed; he invited the delegation to provide input on cases that cause difficulties in the relations between banks and the FINMA. The Board agrees that it is important for the FINMA to be able to assess specific cases because such difficulties cannot be discussed on a theoretical basis.

Meeting between the Swiss National Bank and the AFBS Board The AFBS representatives illustrated the pressure on the business location Switzerland due to cross-border market access becoming increasingly restrictive; the duty of local presence being generalised; the cost of doing business in Switzerland increasing; the absence of measures by the government to simplify market access, be it on a bilateral basis as with Germany. Therefore foreign banks assess their presence in Switzerland and tend to invest abroad. Thomas Jordan made clear that the SNB would not use its monetary policy to support selected business sectors but to make sure that the general business environment was as attractive as possible.
Thomas Jordan also explained his reluctance towards the creation of a sovereign wealth fund in Switzerland. Norway or Singapore funded the SWF through extraordinary revenue. Switzerland, on the contrary, would fund it through central bank money, which it may need in the future for its monetary policy. Moreover, a SWF would imply the transfer of the management of the liability to the Swiss government. The SNB feels it is in a better position to manage such liability, as it is not subject to the same political pressure as the government would be.

Meeting among the European Foreign Banks Associations The representatives of different European foreign banks’ associations meet a representative of the European Banking Federation (EBF-FBE) in Brussels to an exchange of views on different matters, concerning foreign banks. Many issue – in particular host-home country supervision, the new European supervisory mechanism and third country rules – affect foreign banks differently than the domestic banks, typically represented in the EBF’s commission. Among the issues raised was Brexit. How a Brexit would be handled is completely unclear, as there is no resolution plan for a member state leaving the EU.


Friends of Funds Panel on Swiss Asset Management in the new EU Regulatory Environment The panel discussion moderated by the AFBS Secretariat assesses the regulatory environment and the opportunities it offers Swiss asset managers to be active on the EU markets. It concludes that bilateral market access can be interesting for niche players but that the long hoped-for global market access is not realistic for the near future. The pending implementation of the initiative against mass immigration is a major obstacle for clarification of bilateral relations. Nevertheless assets in Switzerland continue to grow and business environment remains attractive, especially for niche providers.

Meeting between esisuisse and the AFBS Board The foreign banks' representative to esisuisse and its secretary general meet with the Board to explain the future challenges the association faces. The ex-post system of financing is under scrutiny from international peers and much explanation on its functioning is needed. Even though the revision on regulation of the scheme may touch on that aspect, banks and esisuisse agree that the ex-ante financing should be maintained since it works well.