Financial Services Ordinance (FINSO)
English is not an official language of the Swiss Confederation. This translation is provided for information purposes only, has no legal force.
Chapter 1 Code of Conduct
Section 1 Duty to Provide Information
Art. 6 Information on the financial service provider
(Art. 8 para. 1 FinSA) 1 Financial service providers state the necessary contact details, in particular their address. 2 Supervised financial service providers shall also state: a. the name and address of the authority supervising them; b. whether they have authorisation as a bank, portfolio manager, manager of collective assets, fund management company or securities firm. 3 Portfolio managers shall also state the name and address of the supervisory organisation to which they are subordinated. 4 Branches and representations of foreign financial service providers in Switzerland shall state their address in Switzerland or provide other necessary contact details.
Art. 7 Informationon the financial service and the financial instruments
(Art. 8 para. 1 and 2 let. a FinSA) 1 The information on the financial service shall contain details of: a. the nature of the financial service, its essential features and functionalities; and b. the fundamental rights and obligations which arise from it for the clients. 2 The information on the risks associated with the financial service shall contain: a. in respect of investment advice for individual transactions: details of financial instruments to be acquired or sold; b. in respect of portfolio management and investment advice taking account of the client portfolio: a description of the risks arising from the investment strategy for the client assets. 3 The information on the general risks associated with the financial instrument shall contain details of: a. the essential features and functionalities of the financial instruments; b. the risks of loss and any obligations arising from the financial instruments for the client. 4 Where the details specified in paragraphs 1–3 are contai
Art. 8 Information on costs
(Art. 8 para. 2 let. a FinSA) 1 Information on costs shall contain in particular details of the one-time and running costs of the financial service and the costs incurred in connection with the acquisition or disposal of the respective financial instrument. 2 Where these details are contained in the key information document or the prospectus, reference can be made to the respective document. 3 Approximate details or bandwidth indications are to be provided of costs which can not be accurately determined in advance or only with a disproportionate amount of effort. If such information can also not be provided or only with a disproportionate amount of effort, this fact must be disclosed and reference made to the risk of additional fees, taxes or other costs. 4 If several financial service providers are involved in the provision of services, they may agree that one of their number shall provide information on all costs. If no such agreement is made, each financial service provider will pro
Art. 9 Information on business affiliations
(Art. 8 para. 2 let. b FinSA) 1 Financial service providers shall provide information on business associations with third parties insofar as these associations may lead to a conflict of interest in connection with the financial service. 2 The information shall include details of: a. the circumstances giving rise to the conflict of interest; b. the risks which the client faces as a result; c. the precautions taken by the financial service provider to reduce the risks. 3 Companies of the group which the financial service provider belongs to are deemed to be third parties for the financial service provider.
Art. 10 Information on the market offer taken into account
(Art. 8 para. 2 let. c FinSA) 1 Financial service providers shall inform their client in particular whether the market offer taken into account when selecting the financial instruments comprises only their own or also other financial instruments. 2 A financial instrument also qualifies as the financial service provider's own if it is issued or offered by companies closely associated with it. 3 The status of close association is deemed to be met in particular if: a. a financial service provider directly or indirectly holds a majority of the shares or voting rights of the offerer or issuer of the financial instrument or otherwise controls the offerer or issuer; or b. the majority of the shares or voting rights of the financial service provider are directly or indirectly held by the offerer or issuer of the financial instrument or the latter otherwise control the financial service provider.
Art. 11 Execution and transmission of client orders
(Art. 8 para. 4 and 13 FinSA) 1 A financial service does not consist solely of executing or transmitting a client order if prior consultation took place. 2 A key information document is deemed to be available if it can be found with reasonable effort. 3 With regard to the execution and transmission of client orders, the retail client may generally consent to the key information document only being made available after conclusion of the transaction. This consent must be given in writing or in another form demonstrable via text separately from the consent given to the general terms and conditions.
Art. 12 Form of information
(Art. 8 para. 3, 9 para. 2 and 3 and 63 let. c FinSA) 1 The information in accordance with Articles 6–11 shall be made available to the retail client on a durable data medium or via a website. 2 If the information is made available via a website, the financial service provider shall: a. ensure that it can at any time be called up, downloaded and recorded on a durable data medium; b. provide the retail client with the website address and the place on this website where the information can be inspected.
Art. 13 Timing of information
(Art. 9 para. 1 FinSA) Clients shall be informed in such a way that they have sufficient time to understand the information regarding the signing of the contract or the provision of the financial service.
Art. 14 Timing of the information on risks and costs
(Art. 9 para. 1 FinSA) Financial service providers shall provide information on risks and costs: a. on conclusion of the contract to establish a client relationship; or b. prior to the first-time provision of the financial service.
Art. 15 Consultation without the client being physically present
(Art. 9 para. 2 and 63 let. c FinSA) 1 Consultation is deemed to take place without the client being physically present within the meaning of Article 9 paragraph 2 FinSA if: a. the parties are not at the same location; and b. on account of the communication medium used, it is not feasible with a reasonable amount of effort to make the key information document available to the retail client before the signing or conclusion of the contract. 2 In the case of consultation without the client being physically present, the retail client may generally consent to the key information document only being made available after conclusion of the transaction. This consent must be given in writing or in another form demonstrable via text separately from the consent given to the general terms and conditions. 3 Consent pursuant to paragraph 2 may be revoked in the same form at any time.
Section 2 Appropriateness and Suitability of Finan
Art. 16 Representative relationships
(Art. 11 and 12 FinSA) In the case of clients acting through an authorised person, the financial service provider will take account of the knowledge and experience of this person for the purpose of the assessment of appropriateness.
Art. 17 Assessment of suitability and exemption from the duty to review
(Art. 12 and 13 FinSA) 1 When enquiring about the client's financial situation, the financial service provider will take account of the nature and amount of their regular income, their assets as well as their current and future financial obligations. 2 When enquiring about the client's investment objectives, the financial service provider shall take into account the details they give in particular on the timeframe and purpose of the investment, their capacity and willingness to take risks as well as any investment restrictions. 3 Based on the information obtained, the financial service provider will draw up a risk profile for every client. Where portfolio management mandates and a continuing consultation relationship are in place, the financial service provider will agree an investment strategy with the client based on these. 4 The financial service provider may rely on the details given by the client insofar as there are no indications that they do not correspond to the facts. 5 Finan
Section 3 Documentation and Rendering of Account
Art. 18 Documentation
(Art. 15 FinSA) The financial service provider must structure the documentation such that they are able as a rule within ten working days to render account to the client about the financial services provided.
Art. 19 Rendering of account
(Art. 16 FinSA) 1 Rendering of account to the client encompasses the documentation: a. on the orders received and executed; b. on the composition, valuation and development of the portfolio in respect of the management of client assets; c. on the development of the portfolio in respect of the management of client custody accounts; d. on the specific costs which the financial service provider was required to provide details of pursuant to Article 8. 2 A durable data medium must be used for rendering of account: a. at the intervals agreed with the client; b. at the latter's request.
Section 4 Transparency and Care in Client Orders
Art. 20 Handling of client orders
(Art. 17 FinSA) 1 For the purpose of handling client orders, financial service providers must have in place processes and systems which: a. are appropriate with regard to their size, complexity and business activity; and b. safeguard the interests and equal treatment of clients. 2 Specifically, they must guarantee that: a. client orders are registered and allocated immediately and correctly; b. comparable client orders are executed immediately in the sequence they are received, except when this is not possible owing to the nature of the order or market conditions or is not in the interest of the client; c. when pooling orders from different clients or pooling client orders with their own transactions and allocating associated trades, the interests of the respective clients are safeguarded and not impaired; d. their retail clients will be informed immediately of any material difficulties arising which could impair the correct execution of the order.
Art. 21 Best execution of client orders
(Art. 18 FinSA) 1 To ensure the best possible outcome for the client, financial service providers shall define for the execution of client orders the necessary criteria for selecting the place of execution, i.e. the price, costs, speed and likelihood of execution and settlement. 2 If the client has issued an express directive, the client order must be executed accordingly. 3 At the request of the client, the financial service provider will furnish proof that they have executed the client's orders in accordance with the criteria specified in paragraph 1. 4 Financial service providers shall review the effectiveness of the criteria at least once a year.
Section 5 Professional clients
Art. 22
Professional clients may release financial service providers from applying the code of conduct set out in Articles 8, 9, 15 and 16 FinSA only in writing or in another form demonstrable via text and only in a document which is separate from the general terms and conditions.
Chapter 2 Organisation
Section 1 Organisational Measures
(Art. 21–24 FinSA)
Art. 23
1 Insofar as they are not subject to special statutory provisions, financial service providers are deemed to satisfy the obligations of the FinSA if they: a. define internal guidelines which are appropriate to their size, complexity and legal form and the financial services offered by them and which are commensurate with the associated risks; b. carefully select staff and ensure that they receive basic training and continuing professional development in respect of the code of conduct and the specific specialised knowledge which they require to perform their concrete tasks; 2 If a business unit consists of several persons: a. the financial service provider shall ensure effective monitoring of the duties in accordance with paragraph 1, in particular by means of appropriate internal controls; b. shall define binding work and business processes.
Section 2 Conflicts of Interest and Related Duties
Art. 24 Conflicts of interest
(Art. 25 FinSA) Conflicts of interest within the meaning of the FinSA are deemed to exist in particular if the financial service provider: a. in breach of the principle of good faith and to the detriment of clients, can achieve a financial advantage for themselves or avoid a financial loss; b. has an interest in the outcome of a financial service provided for clients which is inconsistent with the clients' interest; c. in the provision of financial services, has a financial or other incentive to place the interests of specific clients above those of other clients; d. in breach of the principle of good faith, accepts from a third party with regard to a financial service provided for the client an incentive in the form of financial or non-financial advantages or services.
Art. 25 Organisational precautions
(Art. 25 para. 1 FinSA) In order to prevent conflicts of interest, financial service providers must take the following risk-adequate precautions appropriate to their size, complexity and legal form as well as to the financial services provided by them: a. They shall take measures to identify conflicts of interest. b. They shall take the necessary measures to prevent the exchange of information insofar as it could be contrary to the interest of clients, i.e. an exchange between staff whose activities could result in a conflict of interest; if the exchange can not be prevented, they shall monitor it. c. They shall keep the organisation and management of staff functionally separate insofar as their main activities could cause a conflict of interest among clients or between clients' interests and those of the financial service provider. d. They shall take the measures necessary to prevent staff involved simultaneously or in immediate succession in different financial services from being as
Art. 26 Disclosure
(Art. 25 para. 2 FinSA) 1 If precautions in accordance with Article 25 paragraph 1 FinSA cannot prevent disadvantages for clients or only with a disproportionate amount of effort, the financial service provider shall disclose this in an appropriate manner. 2 To this end, the financial service provider shall describe the conflicts of interest arising in the provision of the respective financial service. The following are to be explained to the clients in general terms: a. the circumstances behind the conflict of interest; b. the resultant risks for them; c. the precautions taken by the financial service provider to reduce the risks. 3 Disclosure may be in standardised or electronic form. The client must be able to record it on a durable data medium.
Art. 27 Impermissible forms of conduct
(Art. 25 para. 3 FinSA) The following forms of conduct are always impermissible: a. the restructuring of client custody accounts with no economic justification in the client's interest; b. the exploitation of information, in particular the exploitation of knowledge of client orders by executing beforehand, in parallel or afterwards identical transactions for the account of staff or the financial service provider; c. the manipulation of services provided in connection with issues and placements of financial instruments; d. the invoicing of a price at variance with the effective closing price when processing client orders.
Art. 28 Documentation
(Art. 25 FinSA) Financial service providers must document those of its financial services where conflicts of interest have arisen or may arise.
Art. 29 Compensation from third parties
(Art. 26 para. 1 let. a FinSA) 1 Compensation accepted from third parties in association with the provision of financial services and which by its very nature cannot be passed on to clients must be disclosed in accordance with Article 26 as a conflict of interest. 2 Companies of the group which the financial service provider belongs to are deemed to be third parties for the financial service provider.
Art. 30 Staff transactions
(Art. 27 para. 1 FinSA) Members of the body responsible for governance, supervision and control, the body responsible for management, partners with unlimited liability as well as persons with comparable functions are deemed to be staff of the financial service provider.
Chapter 3 Register of Advisers
Section 1 Exemption from the duty to register and
Art. 31 Exemption from the duty to register
(Art. 28 FinSA) Client advisers of foreign financial service providers which are prudentially supervised abroad are exempted from the duty to register if the services they provide in Switzerland are exclusively for professional or institutional clients.
Art. 32 Professional indemnity insurance
(Art. 29 para. 1 let. b FinSA) 1 Professional indemnity insurance is taken out to cover the statutory liability arising from pecuniary losses resulting from the activity as financial service provider or client adviser as a consequence of a violation of professional duties to exercise due care. 2 The financial service provider will take out professional liability insurance for those client advisers who are working for a financial service provider and are required to be entered in the register. 3 The amount insured available for all losses within one year must be at least CHF 500,000. Where the insurance is taken out by a financial service provider which employs several client advisers, the minimum amount insured must be at least: a. where there are two to four client advisers: CHF 1.5 million; b. where there are five to eight client advisers: CHF 3 million; c. where there are more than eight client advisers: CHF 10 million. 4 The professional indemnity insurance must have an ordinary no
Art. 33 Equivalent collateral
(Art. 29 para. 1 let. b FinSA) 1 A deposit in the amount of the insurance sum placed with a bank within the meaning of Article 1a of the Banking Act of 8 November 1934 qualifies as collateral equivalent to professional indemnity insurance. The deposit requires the consent of the registration body. 2 For foreign financial service providers subject to prudential supervision abroad, minimum capital corresponding to an amount of CHF 10 million qualifies as equivalent collateral.
Para. 1 — SR 952.0
Section 2 Registration body
Art. 34 Application for a licence
(Art. 31 para. 1 FinSA) 1 The registration body shall submit an application for a licence to the Swiss Financial Market Supervisory Authority (FINMA). The application shall contain all details required to assess it, specifically, details of: a. the place of management; b. the organisation; c. corporate governance and the planned controls; d. the guarantee; e. any activities assigned to third parties. 2 In respect of the persons entrusted with management of the registration body, the application shall contain: a. details of nationality, place of residence, qualified participations in other companies and pending court and administrative proceedings; b. a curriculum vitae signed by the respective person; c. references; d. a judicial record extract; e. an extract from the debt collection register. 3 FINMA may demand further information and details insofar as these are necessary for the assessment of the application.
Art. 35 Supervision by FINMA
(Art. 31 para. 1 FinSA) 1 The registration body shall draw up an annual activity report for submission to FINMA. This report shall also contain, in particular, details of coordination with other registration bodies. 2 FINMA must be given prior notice of the following changes: a. a change in membership of the management board; b. changes to the organisational basis. 3 These changes do not require approval from FINMA. 4 If FINMA grants a licence to several registration bodies, it will ensure appropriate coordination of their practice.
Art. 36 Place of management
(Art. 31 para. 4 FinSA) 1 The registration body must be domiciled in Switzerland and effectively be managed from Switzerland. 2 If it is integrated into an existing legal person, the latter must be domiciled in Switzerland and effectively be managed from Switzerland. 3 The body charged with management of the registration body must be made up of at least two professionally qualified persons. Their place of residence must be at a location from where they can effectively perform their management duties.
Art. 37 Organisation
(Art. 31 para. 3 FinSA) 1 The registration body must have an operational organisation which guarantees the independent fulfilment of its tasks. 2 Operations must: a. be set out in organisational regulations; b. ensure that the registration body has the necessary professionally qualified personnel to perform its task; c. include an internal control system (ICS) and ensure that laws and regulatory requirements are followed (compliance); d. be such as to avoid conflicts of interest, in particular with other revenue-based business units; e. permit public consultation online; and f. provide for an appropriate strategy which allows business operations to be maintained or restored as quickly as possible if damaging events occur.
Art. 38 Delegation of tasks
(Art. 31 para. 3 FinSA) 1 The registration body may only delegate activities of minor significance to third parties. 2 The third parties must have the necessary skills, knowledge and experience to perform the delegated activities. 3 The registration body shall carefully instruct and monitor the appointed third parties. 4 Delegation must be agreed in writing or in another form demonstrable via text.
Art. 39 Licence costs
(Art. 31 para. 1 FinSA) In accordance with the FINMA Ordinance on the Levying of Supervisory Fees and Duties of 15 October 2008, the registration body shall bear the costs of: a. the licensing procedure; b. the procedure for instigating the necessary measures to remedy deficiencies; c. the procedure leading to revocation of the licence.
SR 956.122
Art. 40 Retention period
(Art. 31 para. 4 FinSA) The registration body shall retain registration documents and records for a period of ten years.
Section 3 Notification duty and fees
Art. 41 Notification duty
(Art. 32 para. 2 and 3 FinSA) 1 Client advisers shall report to the registration body within 14 days: a. any change in name; b. any change in the name or address of the financial service provider for which they work; c. any change in their function and position within the organisation; d. any change in their areas of activity; e. basic training and continuing professional development completed; f. any change in ombudsman's office; g. the complete or partial termination of professional indemnity insurance cover; h. termination of activity as a client adviser; i. convictions for criminal offences under the financial market acts in accordance with Article 1 of the Financial Market Supervision Act of 22 June 2007 (FINMASA) or for criminal offences against property under Articles 137–172ter of the Swiss Criminal Code; j. a prohibition imposed on them from performing an activity in accordance with Article 33a FINMASA or a prohibition from practising a profession in accordance with Article 33
Para. 1 let. i — SR 956.1 Para. 1 let. i — SR 311.0
Art. 42 Fees
(Art. 33 FinSA) 1 Anyone who occasions a ruling by the registration body or requests a service from the registration body is liable to a fee. The registration body may levy an annual fee to cover annually recurring expenses. 2 The fee for first-time entry in the register of advisers is CHF 500–2500 and for renewal of the entry CHF 200–1000. It is set within these ranges on the basis of the average time required for the performance of similar functions. 3 In the case of exceptionally voluminous or particularly difficult entries, the fee stipulated in paragraph 2 may be based on time spent. 4 The fee for all other rulings and services is based on time spent. 5 The hourly fee rate is CHF 100–500, depending on the functional level of the person at the registration body carrying out the task. 6 A surcharge of up to 50 percent of the ordinary fee can be levied for rulings and services provided, on request, urgently or outside normal working hours by the registration body. 7 In all other resp
Para. 7 — SR 172.041.1