With the introduction of the Financial Institutions Act (FinIA) and the Financial Services Act (FinSA) as well as the implemented ordinances FinIO, AOV and FINSO and the associated amendments of other ordinances as of 1 January 2020, the regulation of financial services in Switzerland reaches another level.
The requirements for licensing, supervision, organisation and internal control of the compliant behaviour of financial institutions will be increased or subjected to new rules.
Previously unregulated independent asset managers of individual client assets and trustees will be qualified as financial institutions and will now be subject to licensing requirements and supervision under various financial market laws. Appropriate corporate governance rules and a business organisation that ensures the financial institution fulfils its legal obligations are required.
Asset managers and trustees must have an appropriately equipped risk management system and effective internal controls which, among other things, ensure compliance with legal and internal regulations.
With regard to the prevention of money laundering and the financing of terrorism, the Anti-Money Laundering Act (AMLA) stipulates that financial intermediaries must ensure that their staff are sufficiently trained and that controls are carried out. Asset managers and trustees also qualify as financial intermediaries and must therefore have an organisation that ensures compliance with the AMLA's obligations.
1. Professional competence without burdening your own resources
The law requires that the compliance functions be performed by a suitably qualified person within the business or be delegated to a qualified external body.
This requires a functional separation between the supervised business activities of the financial institution on the one hand and compliance and risk management on the other, so that the same person may not be involved in both activities simultaneously.
Since many small and medium-sized asset managers and trustees have neither the necessary expertise nor the required human resources, outsourcing AML’s compliance tasks to a professional external officer is often the most efficient solution.
2. Professionalism and cost efficiency
Due to the existing expertise and experience of the external compliance officer, the financial services provider is not burdened with unnecessary costs that would otherwise be incurred for the training of its internal staff. In addition, professional compliance officers regularly have a qualified support staff at their disposal who can provide the financial services provider with support tailored to its business model. The financial services provider is thus provided with a solution that combines the greatest possible cost efficiency with well-founded professional competence.
3. Focus on your core business
The financial services provider can rely on the compliance officer to monitor compliance within the company’s legal and internal regulations in the best possible way without burdening the provider. This enables the financial services provider to use its resources efficiently for its core business.
4. Consulting and developing of the necessary internal processes, instructions and contracts
Professional compliance officers have the necessary expertise and experience with the AMLA, which enables them not only to advise the financial services provider on AMLA obligations, but also to optimise its internal processes and draw up AMLA relevant directives or contractual documentation.
5. Support in obtaining permits and implementing legal and regulatory requirements
With the introduction of the licensing requirement for asset managers and trustees and their subordination to supervision under financial market laws as of 1 January 2020, these institutions face a hurdle that is unlikely to be overcome without external support.