Do you need the authorization to distribute collective investment schemes?Yes, if you sell (distribute) units in a collective investment scheme, e.g. funds to clients, or you advertise this service as well as if you sell (distribute) units in foreign collective investment schemes to institutional investors and/or to high-net-worth individuals.
But, if you sell (distribute) units in collective investment schemes only to banks, securities dealers, insurances, fund management companies and/or asset managers of collective investment schemes and you sell (distribute) units in Swiss collective investment schemes only to institutional investors and/or to high-net-worth individuals – you do not need an authorization.
In case of securities trading, you need an authorization if you buy and sell shares and other securities for clients and if you buy securities to re-sell in the short-term which generates a turnover of CHF 5 billion or more per year. However, no authorization needed if you buy and sell shares and other securities to manage your own assets.
Do you need the authorization to provide insurance? Yes, if you insure risks and dangers for clients. However, not when you render services voluntarily and without any contractual obligation.
You have to register as insurance intermediary if you broker insurance contracts.
Nevertheless, this is not needed if you represent an authorized insurance company when you broker insurance contracts.In FINMA's Guidance 04/2017, published on 29 September 2017, FINMA set out its position on initial coin offerings (ICOs) and highlighted areas in which ICOs may be covered by existing financial market regulation.
ICO Regulation?In view of the sharp increase in ICO projects in recent months, FINMA is receiving significant numbers of enquiries from market participants about the applicability of financial market regulation to ICOs and the existence of licensing requirements. ICOs raise a variety of legal issues for which there is no relevant case law and no consistent legal doctrine. Given the wide variety of types of token and ICO set-ups, it is not possible to generalize. Circumstances must be considered holistically in each individual case. FINMA Guidelines from 16. September 2018, nevertheless, classified the tokens issued during the ICO and clarified which regulations may be applicable in case of issuance of each token type.
It should be mentioned, that if FINMA concludes that the tokens of an ICO constitute securities, they fall under securities regulation. Under the Stock Exchange Act (SESTA), book-entry of self-issued uncertificated securities is essentially unregulated. The same applies to the public offering of securities to third parties. The creation and issuance of derivative products as defined by FMIA to the public on the primary market is however regulated (Art. 3 para. 3 Stock Exchange Ordinance, SESTO).
Certain financial market activities require advance authorization. Issuing licenses and granting authorization are therefore key FINMA activities. Applicants who fulfil the licensing requirements receive a license and are then supervised by FINMA to ensure compliance. Similarly, the
Swiss parliament approves revision of swiss insolvency rules to ensure that Switzerland remains agile in adapting its framework to evolving market needs.
FINMA encourages innovation and competitiveness in the Swiss financial marketplace. Clearly, an innovative and competitive Swiss financial marketplace is high on FINMA's list of priorities. Updates like the
rules on video and online identification show Switzerland’s commitment to modernizing regulatory approaches while safeguarding financial security.
Legal disclaimer. This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.