FinSA
The FinSA in a Nutshell
The Financial Services Act (FinSA) is a Swiss legislation designed to strengthen investor protection and enhance transparency in the Swiss financial services sector. It was enacted by the Swiss Federal Assembly and came into force on January 1, 2020.
By implementing the FinSA, Switzerland seeks to align its financial services regulation with international standards, ensuring a more secure and transparent environment for investors and financial institutions.
The Financial Services Act (FinSA) has the following main objectives:
- Protect the interests of clients and enhance investor protection.
- Construct comparable conditions for providing financial services among financial institutions.
- Strengthen the reputation and competitiveness of the Swiss financial centre.
Find summary details about Arab Bank (Switzerland) Ltd.
Client Classification
The FinSA defines the following classes of clients, with each category assigned a different level of investor protection:
- Retail Clients
- Professional Clients
- Institutional Clients
Find further information about Client Classification
Financial Services
The FinSA defines the following activities carried out for clients as financial services:
- Acquisition or disposal of financial instruments.
- Receipt and transmission of orders in relation to financial instruments – see Execution Only Service for more details.
- Administration of financial instruments – see Discretionary Mandate Service for more details.
- Provision of personal recommendations on transactions with the financial instruments – see Advisory Services for more details.
- Granting of loans to finance transactions with financial instruments – see Lombard Loan Service for more details.
Provision of a Financial Service
The main requirements to be followed according to the FinSA are:
- Ensuring appropriate knowledge and training of relationship managers and other employees.
- Adequately informing clients on general elements related to the provided financial services.
- Providing suitable information about the risks and costs associated with financial services and instruments.
- Conducting appropriateness and suitability assessments.
- Ensuring proper documentation.
- Ensuring transparency and care in client orders, including best execution.
- Avoiding or mitigating where not possible conflicts of interest.
- Adhering to product documentation rules for offerings and issuance of financial instruments.
Financial Instruments
The following products are considered financial instruments in the sense of the FinSA:
- Equity securities (Shares and securities allowing participation and voting rights).
- Debt instruments and Bonds.
- Units in collective investment schemes (investment funds).
- Structured products.
- Derivatives.
- Deposits for which the redemption value or interest is risk- or price-dependent.
Not included are FX/PM spot transactions, claims/receivables for physical delivery or cash settlement of FX/PM, custody accounts or deposits, including callable and fixed term deposits and fiduciary deposits.
Best Execution
Under the FinSA, financial institutions shall take all necessary steps to obtain the best possible result for clients on a consistent basis when executing transactions on their behalf.
Find further information about Best Execution
Conflicts of Interest
The FinSA requires that any potential conflicts of interest are clearly disclosed or otherwise mitigated so they may not result in a financial disadvantage for the client.
Find further information about Conflicts of Interest
Costs and Fees
Costs and fees may be incurred in connection with the provision of financial services. If an overview of personal costs and fees or if a printed/electronic copy of the schedule is preferred, the responsible relationship manager will be pleased to assist.
Compensation from Third Parties
The FinSA requires that the receipt and payment of compensation by third parties to the bank that is not paid directly by a client or on behalf of a client is clearly regulated as such a compensation may lead to a potential conflict of interest. Clients must either be properly informed about the existence of such compensation or waive the right to have such compensation passed on, or the bank needs to pass on the compensation received to the client.
Find further information about Compensation from Third Parties
Risks in Financial Instruments Trading
The FinSA requests that financial institutions clearly make the client aware that investments in financial instruments contain opportunities but also bear risks. It is of utmost importance that investors understand the risks of financial instruments.
The brochure ″Risks Involved in Trading″ of the Swiss Bankers Association contains general information on typical financial services and on the characteristics and risks of financial instruments.
Find further information about Risks involved in Trading
Product Information
The FinSA requests that financial institutions provide product information sheets (e.g. KID) for financial instruments if the manufacturer provides them.
Find further information about our Products
Complaints Handling
The FinSA demands that banks officially inform how clients have to act in case of complaints, or if clients are not satisfied with the reply given by the bank.
For further information about Complaints Handling
Disclaimer
The content of this website is for information purposes only. It does not constitute a financial service, nor an offer or advertisement under the Financial Services Act (FinSA). In particular, it does not constitute a recommendation to use a service, to purchase or sell investment instruments or to carry out any other transaction, nor should it be construed to constitute any investment advice. If you have received this information, it is on your specific request only and for your personal use only. The content of this website is not intended for citizens of the United States of America or the United Kingdom or for persons who are domiciled or resident in any of these countries or in any other countries where the access to the information contained in this website is or may be restricted by local legislation or other regulations. If you are from such a jurisdiction, you are not authorised to proceed and must exit this website immediately. The information in this website is not the result of a financial analysis or research and is not subject to the Swiss Bankers Association’s Directive on the Independence of Financial Research. The content of this website is of general nature and exclusively based on publicly available information obtained from various sources that Arab Bank (Switzerland) Ltd. considers reliable as of the date hereof. No representation of any kind is made that the information contained herein is accurate or complete. Forward-looking forecasts reflect our current assessment of a possible future economic development. However, the actual results might differ from these expectations due to a variety of factors. Past performance is no guarantee for current or future performance. Nothing contained herein shall constitute any representation or warranty as to future performance.
Related pages
Learn how Arab Bank Switzerland complies with the Financial Services Act (FinSA) designed to strengthen investor protection and enhance transparency in the Swiss financial services sector.
Our Privacy Policy explains how Arab Bank (Switzerland) Ltd treats your personal data in accordance with the Swiss Federal Act on Data Protection when using our website or any of our services and products.
The Automatic Exchange of Information (AEoI) is an international tax standard governing how tax authorities of participating countries exchange information related to taxpayers’ foreign banks and safekeeping accounts with one another.
Understand how the Deposit Insurance Scheme, covering deposits of private and corporate clients held at Arab Bank (Switzerland) Ltd, works and the level of losses covered and the specific treatment for multiple accounts.
ABS Foundation
We have formed the Arab Bank Switzerland Foundation for Sustainability with a clear mission to engage our clients and stakeholders within a framework of sustainable development goals.
