Relaunch Investment Suitability
Relaunch Investment Suitability
Relaunch Investment Suitability
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The following table provides an overview of the deficiencies<br />
detected by FINMA as well as the proposed courses of action.<br />
Deficiencies and proposed actions at a glance<br />
Topic Problem Action Explanations<br />
1 Prospectus and<br />
information<br />
requirements<br />
2 Conduct at the<br />
point of sale<br />
(POS)<br />
3 Documentation<br />
at the POS<br />
4 Client<br />
segmentation<br />
5 Financial service<br />
providers not<br />
subject to<br />
prudential<br />
supervision<br />
6 Foreign financial<br />
products<br />
7 Dispute<br />
resolution<br />
• non-uniform prospectus<br />
publication obligations<br />
• inadequate risk disclosure<br />
• lack of clarity<br />
inadequate<br />
codes of conduct<br />
extension of prospectus and<br />
information requirements to<br />
product level<br />
strengthened, uniform<br />
codes of conduct<br />
lack of transparency extended documentation<br />
requirements<br />
deficient product-neutral<br />
client segmentation<br />
targeted emphasis on<br />
retail clients<br />
inconsistent supervision compulsory registration<br />
and codes of conduct<br />
incoherent regulations strengthened regulation<br />
of cross-border sales<br />
more difficult enforcement of<br />
private clients’ claims<br />
creation of an<br />
ombudsman<br />
8 Ernst & Young <strong>Relaunch</strong> <strong>Investment</strong> <strong>Suitability</strong><br />
• coherent, preferably product-neutral,<br />
prospectus publication obligations<br />
• standardized, product-neutral<br />
information for packaged financial<br />
products<br />
• coherent obligation to obtain information<br />
including information regarding<br />
investment objectives, financial situation,<br />
investors’ appetite for risk and determining<br />
whether a product is suitable/appropriate<br />
• obligation to provide information<br />
regarding conflict of interests and fees<br />
• clarification of products and investment<br />
strategies as well as costs and taxes<br />
• this could involve an obligation to<br />
document the risk profile and the creation<br />
of a standardized protocol for investment<br />
advise and sales dialogs<br />
• significantly reduced requirements<br />
for qualified clients<br />
• possible client choice (“opt in”/“opt out”)<br />
• division of financial service providers<br />
as regards scope of supervision<br />
• requirements for appropriate educational<br />
background and professional experience<br />
• recording of cross-border “cold calling” to<br />
Switzerland from abroad<br />
• licensing requirement for cross-border<br />
advertising in Switzerland for public<br />
deposits<br />
• no expensive court cases<br />
• competence to decide disputes and the<br />
possibility of collective litigation for<br />
equivalent cases is conceivable
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