Financial Services Act (FinSA)
English is not an official language of the Swiss Confederation. This translation is provided for information purposes only, has no legal force and may not be relied on in legal proceedings.
Chapter 1 Required Knowledge
Art. 6
Client advisers must have sufficient knowledge of the code of conduct set out in this Act and the necessary expertise required to perform their activities.
Chapter 2 Code of Conduct
Section 1 Principle
Art. 7
1 Financial service providers must comply with the supervisory duties set out under this title when providing financial services. 2 The specific provisions of other pieces of legislation are reserved.
Section 2 Duty to Provide Information
Art. 8 Content and form of information
1 Financial service providers shall inform their clients of the following: a. their name and address; b. their field of activity and supervisory status; c. the possibility of initiating mediation proceedings before a recognised ombudsman in accordance with Title 5; and d. the general risks associated with financial instruments. 2 They shall also provide information on: a. the financial service personally recommended and the associated risks and costs; b. the business affiliations with third parties in connection with the financial service offered; c. the market offer taken into account when selecting the financial instruments. 3 Where financial instruments are personally recommended, financial service providers shall also make the key information document available to the retail client insofar as such a document must be produced for the financial instrument recommended (Articles 58 and 59). In the case of a compound financial instrument, a key information document shall be made availab
Art. 9 Timing and form of information
1 Financial service providers shall inform their clients before the signing of the contract or provision of the service. 2 Financial service providers shall make the key information document available free of charge to their retail clients before the signing or conclusion of the contract. Where consultation takes place without the client being physically present, the key information document may be made available after conclusion of the transaction if the client so consents. Financial service providers shall document said consent. 3 The information may be made available to clients in standardised form on paper or electronically.
Section 3 Appropriateness and Suitability of Finan
Art. 10 Duty to review
Financial service providers that provide investment advice or portfolio management services shall perform an appropriateness or suitability review.
Art. 11 Assessment of appropriateness
A financial service provider that provides investment advice for individual transactions without taking account of the entire client portfolio must enquire about its clients' knowledge and experience and must check whether financial instruments are appropriate for its clients before recommending them.
Art. 12 Assessment of suitability
A financial service provider that provides investment advice taking account of the client portfolio or portfolio management must enquire about its clients' financial situation and investment objectives as well as their knowledge and experience. This knowledge and experience relates to the financial service and not to the individual transactions.
Art. 13 Exemption from the duty to review
1 Where solely executing or transmitting client orders, financial service providers are not obliged to perform an appropriateness or suitability assessment. 2 They shall notify the clients before providing the service described in paragraph 1 that an appropriateness or suitability assessment will not be performed. 3 In the case of professional clients, they may assume that these clients have the required level of knowledge and experience and can financially bear the investment risks associated with the financial service.
Art. 14 Non-assessable or lacking appropriateness or suitability
1 If the information received by the financial service provider is insufficient for assessing the appropriateness or suitability of a financial instrument, it shall inform the client before providing the service that it cannot perform this assessment. 2 If the financial service provider is of the opinion that a financial instrument is not appropriate or suitable for its clients, it shall advise them against it before providing it. 3 A lack of knowledge and experience may be compensated for by providing clients with information.
Section 4 Documentation and Rendering of Account
Art. 15 Documentation
1 Financial service providers shall document in an appropriate manner: a. the financial services agreed with clients and the information collected about them; b. the notification described in Article 13 paragraph 2 or the fact that they advised the clients in accordance with Article 14 against availing of the service; c. the financial services provided for clients. 2 When providing investment advice, they shall also document clients' needs and the grounds for each recommendation leading to the acquisition or disposal of a financial instrument.
Art. 16 Rendering of account
1 If so requested, financial service providers shall provide their clients with a copy of the documentation mentioned in Article 15 or shall make it accessible to them in another appropriate manner. 2 Moreover, at the clients' request, they shall render account of: a. the financial services agreed and provided; b. the composition, valuation and development of the portfolio; c. the costs associated with the financial services. 3 The Federal Council shall regulate the minimum content of the information specified in paragraph 2.
Section 5 Transparency and Care in Client Orders
Art. 17 Handling of client orders
1 Financial service providers shall uphold the principles of good faith and equal treatment when handling client orders. 2 The Federal Council shall regulate how the principles under paragraph 1 are to be upheld, specifically regarding the procedures and systems for processing client orders.
Art. 18 Best execution of client orders
1 Financial service providers shall ensure in the execution of their clients' orders that the best possible outcome is achieved in terms of cost, timing and quality. 2 Regarding cost, they shall consider not only the price of the financial instrument but also the expenses incurred in the execution of the order and the compensation from third parties mentioned in Article 26 paragraph 3. 3 If they employ staff to execute client orders, financial service providers shall issue internal directives on the execution of client orders which are commensurate with the number of such staff members and the structure of operations.
Art. 19 Use of clients' financial instruments
1 Financial service providers may borrow financial instruments from clients' portfolios as a counterparty or act as an agent for such transactions only if the clients have given their prior and express consent to these transactions in writing or in another form demonstrable via text in an agreement that is separate from the general terms and conditions. 2 The clients' consent is valid only if: a. they have been clearly informed of the risks associated with such transactions; b. they are entitled to equalisation payments for the proceeds due from the financial instruments borrowed; and c. they are compensated for the financial instruments borrowed. 3 Short selling with the financial instruments of retail clients is not permitted.
Section 6 Institutional and Professional Clients
Art. 20
1 The provisions of this chapter do not apply to transactions involving institutional clients. 2 Professional clients may expressly release financial service providers from applying the code of conduct set out in Articles 8, 9, 15 and 16.
Chapter 3 Organisation
Section 1 Organisational Measures
Art. 21 Appropriate organisation
Financial service providers shall ensure that they fulfil their duties under this Act through internal regulations and an appropriate organisation of operations.
Art. 22 Staff
1 Financial service providers shall ensure that their staff possess the necessary skills, knowledge and experience to perform their work. 2 Financial service providers not subject to supervision in accordance with Article 3 of the Financial Market Supervision Act of 22 June 2007 (FINMASA) must also ensure that only persons listed in the register of advisers (Article 29) act as client advisers for them.
Para. 2 — SR 956.1
Art. 23 Involvement of third parties
1 Financial service providers may appoint third parties for the provision of financial services. 2 They shall appoint only persons who possess the necessary skills, knowledge and experience for their work and have the required authorisations and register entries for this activity, and shall carefully instruct and supervise the appointed persons.
Art. 24 Chain of providers
1 Financial service providers that mandate another financial service provider to provide a financial service for clients remain liable for the completeness and accuracy of the client information and for fulfilling the duties set out in Articles 8 to 16. 2 If the mandated financial service provider has reasonable grounds to suspect that the client information is incorrect or that the duties under Articles 8 to 16 were not fulfilled by the mandating financial service provider, it shall provide its service only after it has ensured the completeness and accuracy of the information and compliance with the code of conduct.
Section 2 Conflicts of Interest
Art. 25 Organisational precautions
1 Financial service providers shall take appropriate organisational measures to prevent conflicts of interest that could arise through the provision of financial services or any disadvantages for clients as a result of conflicts of interest. 2 If disadvantages for clients cannot be excluded, this possibility must be disclosed to them. 3 The Federal Council shall regulate the details in this respect; in particular, it shall designate forms of conduct that are always impermissible on account of conflicts of interest.
Art. 26 Compensation from third parties
1 Financial service providers may accept compensation from third parties in association with the provision of financial services only if they: a. have expressly informed the clients of such compensation in advance and the latter relinquish such compensation; or b. pass the compensation on to the clients in full. 2 The information for the clients must contain the type and scope of the compensation and must be given to them before provision of the financial service or conclusion of the contract. If the amount cannot be determined in advance, the financial service provider shall inform its clients of the calculation parameters and the ranges. If so requested, the financial service providers shall disclose the amounts effectively received. 3 Compensation is defined as payments from third parties accruing to the financial service provider in association with the provision of a financial service, such as brokerage fees, commissions, discounts or other financial benefits.
Art. 27 Staff transactions
1 Financial service providers shall take measures to prevent staff from misusing for own-account transactions any information made available to them only by virtue of their function. 2 They shall issue an internal directive on the required monitoring measures.
Chapter 4 Register of Advisers
Art. 28 Duty to register
1 Client advisers of Swiss financial service providers not subject to supervision in accordance with Article 3 FINMASA as well as client advisers of foreign financial service providers may carry out their activity in Switzerland only if they are entered in a register of advisers. 2 The Federal Council may exempt prudentially supervised client advisers of foreign financial service providers from the duty to register if the services they provide in Switzerland are exclusively for professional or institutional clients within the meaning of Article 4. 3 It may make the exception under paragraph 2 dependent on a reciprocal right being granted.
Para. 1 — SR 956.1
Art. 29 Registration conditions
1 Client advisers are entered in the register of advisers if they prove that they: a. satisfy the requirements set out in Article 6; b. have taken out professional indemnity insurance or that equivalent collateral exists; and c. are themselves affiliated to an ombudsman (Art. 74) in their capacity as a financial service provider, or that the financial service provider for which they work is affiliated to an ombudsman, where a duty to affiliate exists (Art. 77). 2 Client advisers shall not be entered in the register of advisers if they: a. have been convicted of criminal offences in accordance with Articles 89 to 92 of this Act or Article 86 ISA or of property offences under Articles 137 to 172ter of the Swiss Criminal Code; or b. have been prohibited from performing the registrable activity in accordance with Article 33a FINMASA or from practising a profession in accordance with Article 33 FINMASA. 3 If client advisers are employed as staff by a financial service provider, the conditio
Para. 1 let. c — Amended by No I 4 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021 (AS 2021 33; BBl 2020 233). Para. 2 let. a — SR 961.01 Para. 2 let. a — SR 311.0 Para. 2 let. b — SR 956.1
Art. 30 Contents
The register of advisers shall contain at least the following details on client advisers: a. surname and forenames; b. name or company name and address of the financial service provider for which they work; c. function and position of the client adviser within the organisation; d. fields of activity; e. basic training and continuing professional development completed; f. ombudsman's office to which they themselves in their capacity as financial service providers or the financial service provider for which they work are affiliated; g. date of the register entry.
Art. 31 Registration body
1 The registration body shall keep the register of advisers. It requires a licence from the Swiss Financial Market Supervisory Authority (FINMA). 2 FINMA may grant a licence to two or more registration bodies provided this is objectively justified. 3 The registration body must be organised so as to guarantee the independent fulfilment of its tasks. 4 The registration body and the persons responsible for its management must provide the guarantee of irreproachable business conduct. Furthermore, the persons responsible for its management must enjoy a good reputation and have the specialist qualifications required for their function. 5 If the registration body no longer fulfils the requirements under this Act, FINMA shall order the measures necessary to remedy the deficiencies. If, within a reasonable period, the registration body fails to remedy the deficiencies preventing it from fulfilling its tasks, FINMA shall withdraw its licence to register client advisers. 6 If a private body is no
Art. 32 Keeping of the register and notification duty
1 The registration body shall decide which advisers are registered and deregistered as advisers and shall issue the necessary rulings. 2 Registered client advisers and the financial service provider for which they work must notify the registration body of all changes in the facts underlying their registration. 3 The competent supervisory authorities shall notify the registration body if they: a. prohibit any registered client advisers from performing an activity or practising a profession as defined in Article 29 paragraph 2 letter b; b. learn of a criminal conviction against registered client advisers in accordance with Article 29 paragraph 2 letter a. 4 If the registration body learns that a client adviser no longer meets a condition for registration, it shall deregister that client adviser. 5 The contents of the register of advisers shall be public and may be consulted online.
Art. 33 Fees
1 The registration body shall charge fees to cover the expenses incurred in its rulings and services. 2 The Federal Council shall regulate the details. This regulation is based on Article 46a of the Government and Administration Organisation Act of 21 March 1997.
Para. 2 — SR 172.010
Art. 34 Procedure
The procedure for registration entries is based on the Administrative Procedure Act of 20 December 1968.
SR 172.021