With the adoption of FIDLEG, Swiss financial institutions will need to amend their advisory processes to comply with these new rule sets. This third blog post of our FIDLEG series explores 8 key design decisions financial institutions should consider when implementing FIDLEG. In particular, it showcases the impact of the new rules on the onboarding as well as offering and sales stages of the advisory value chain. By taking relevant design decisions early, financial services providers can significantly reduce the burden and increase the speed of implementation.
Banks everywhere in Europe focus on “digital” which has led to significant advances in this space. As a top priority, banks are further extending functionalities of online banking, working to achieve the best user experience (UX) to further develop the mobile banking channel. They are exploring innovation topics such as blockchain technology or open and beyond banking. All of these fast-paced developments across such a broad range of topics make it challenging to compare banks’ digital capabilities.
In what functionalities have leading players invested? How have they developed their channels to facilitate client interaction in the digital age? Which bank offers the best UX in EMEA?
On 25 June 2018, an amendment to Directive 2011/16/EU, commonly referred to as “DAC6”, came into force, which may have significant impact on Swiss entities. DAC6 requires the disclosure of certain cross-border tax planning arrangements by way of a reporting to the local tax authorities. While the rules do not apply in Switzerland directly, Swiss intermediaries may nevertheless be affected if they have operations or otherwise provide services in any EU country. Even purely Swiss intermediaries that serve EU clients should carefully consider the impact of DAC6.
Switzerland remains the leading international wealth management centre, beating eight other major centres in competitiveness, size and performance, as Deloitte’s International Wealth Management Centre Ranking 2018 shows. Competition is fierce, however, and Switzerland might yet lose the leading position. The Swiss first place is especially precarious in terms of size, with the UK now barely behind.
Our previous blog on the FIDLEG topic dealt with the genuine connection between Swiss FIDLEG and its EU counterparts (MiFID II or PRIIPs), offering potential synergies in the implementation due to similarities in their objective and scope.
We now focus more specifically on FIDLEG requirements linked to (client) advisory going beyond respective MiFID II requirements or not existing under MiFID II. Ultimately, these insights also set the stage for financial services providers having to define the scope and approach of their implementation of the FIDLEG requirements.
Whilst the EU Benchmark Regulation (“BMR”) came into effect on 1 January 2018 many benchmark, users have not fully assimilated the impact of the BMR on their business. Firms may have concluded that they would not be impacted by the BMR, simply because they are not benchmark administrators1 . However, unlike the IOSCO Principles for Financial Benchmarks, the BMR also impacts benchmark users.
Thirty months after the Swiss Federal Council adopted the dispatch on FIDLEG (Finanzdienstleistungsgesetz) and FINIG (Finanzinstitutsgesetz), on 12 June 2018 the National Council resolved the final outstanding open points and adopted FIDLEG & FINIG on 15 June 2018. A consultation draft for the ordinances of the two regulations is expected in autumn 2018. FIDLEG & FINIG are the Swiss counterparts of the European MiFID II & PRIIPs regulations, which came into force in January 2018. Both sets of regulations (MiFID II/PRIIPs and FIDLEG/FINIG) seek to improve client protection and create a level playing field for financial intermediaries.
With players in the financial services industry already having undertaken a major effort to implement MiFID II and PRIIPs, they may now face similar challenges with FIDLEG. This first blog post in our FIDLEG series draws parallels with the most challenging requirements already experienced during the MiFID II implementation journey.
European business climate cooling but still optimistic: slightly above average outlook for financial services
This year looks likely to continue the titanic battle between risk and growth. Just when growth seemed to be winning, risk made a come-back and at the moment both seem pretty evenly matched. Business sentiment among European CFOs has cooled compared to autumn 2017, but it remains optimistic, as the latest results of the European CFO Survey show. Optimism among financial service (FS) CFOs is slightly above the European average, but is slightly below for Swiss CFOs from all industries.
The European Union’s (EU) Market Abuse Regulation (MAR) came into effect on 3 July 2016. MAR strengthened the EU’s previous market abuse framework by extending its scope to new markets, new platforms and new behaviours and the significant introduction of monitoring trade orders as well as executions. It contained prohibitions of insider trading, unlawful disclosure of insider information and market manipulation, alongside provisions to prevent and detect these behaviours.
When IFRS9 came into force in January 2018, many in the credit risk world thought the hard part was over. After all, conventional wisdom suggested the new standard would cause a one-off shift in expected loss provisioning and life would return to normal.
However, as firms are now rapidly gaining experience with the first generation of models, a number of practical implications have sprung up with far reaching consequences on business models beyond the challenge of accounting for potential credit losses. One such challenge is the adequate pricing of the implied economic costs of credit under the new standard.
There are various elements of corporate governance that interact with each other and influence the organization’s performance. Our research1 indicates that the most effective elements of ‘good’ governance are independence and diversity of the Board of Directors, remuneration of senior executives, characteristics of the CEO, and the organization’s oversight and ownership structure. Here are six relevant drivers of corporate governance that should be essential to any Financial Services Firm.