After 2 years of Covid, 2 months of peace, our minds cannot be elsewhere than focused on the War in which Ukrainians are fiercely combatting for the restoration of peace in their Country but also its maintenance for our whole Continent. “Would it not be a great opportunity for President Putin to resign now, go fishing with his friends, and leave fellow Russians, Ukrainians, and the Region, in peace? After freeing A. Navalny and asking forgiveness for the disappearance of B. Nemtsov?” This wishful thinking is a total utopia, but in no way greater than hoping for an extension of the 31.12.2022 deadline granted by our legislator to Portfolio Manager/ Trustees.

 

FINMA is expecting all applications to be filed with an OS by end June 2022. It cannot be clearer than that. This leaves only 6 months for the OSs to review the remaining 2000 applications that declared would be filing.  

 

After discussions with “competitors” which are more brainstorming colleagues than competitors in fact, lawyers, OSs, what is coming as a surprise is the low number of applications currently in the process regarding those official numbers.

 

It’s fair to say that with over 50 applications under supervision, all stages included from the strategy definition to the FINMA approval, via the business plan and the document gathering, Berclaz & Associés has a good vision of this authorization process.

 

  • Do not underestimate this authorization: Although to date no application has been refused by FINMA (officially at least) It’s far from simple.
  • You must remain dedicated throughout all the process: Sound advice is to plan a fixed period, for example 1 full month to work on it from scratch until the submission to the OS.
  • Be honest with yourself: There are 2 types of portfolio managers / trustees. The CFO/Analyst/legal type or the CEO/ RM, typically the RM you can drop moneyless and not speaking the language in the middle of a tropical country and that by day end will be invited by the President for diner, if you are that second category, seek assistance. Do not even imagine completing this exercise successfully and keeping a smile on your face without assistance. Filing is one thing, getting the authorization is another. The other category you can try but seek a checkup with professionals before sending.
  • This is a dynamic exercise: Every now and then an important update / change occurs from an OS or/& FINMA, which means that files in the process let’s say since months are void and have to be completely reworked. Even when you may think its all solved and done, the file can come back for improvements or clarifications. If you keep this open state of mind approaching this exercise, you will save energy. It’s not personal, it’s simply like that.
  • There is a cost: This is not a copy/paste exercise with an Identification card and CV to provide. It’s a banking license for small to medium size entities. I can hint that the total exercise represents 100 hours of work (Portfolio Manager/ Trustee, Expert assistance, OS review & Finma review included). I let you set an average hourly rate and multiplicate.
  • But there is a reward as well: The FINMA licence does not come quick nor cheap. It’s a validation, a sign of Excellence, with a big “E” which is the confirmation of an existing practice or the aim of the entity backed by substance. You will be feeling proud of the achievement when you will receive it. You may totally forget the hours spent on the exercise. I’m exaggerating!
  • Alternatives: Do you really want and need this license? I remember the conclusion of the first feedback I gave on the process, which can be found here : https://outsourcingcompliance.com/swiss-iams-trustees-finia-finsa-application-first-personal-feedback-on-experiences/ “The Portfolio Managers/ Trustess wanting the Finma authorization the most, will get it, others…”

It was actually so true. If you are hesitant to do it, don’t torture yourself, depending on where you stand, there are alternatives which should not be neglected: Merging, Introductions to counterparts to join forces, Adapting your activity. Reach out if you are looking for solutions.

 

Conclusion: We are confident that FINMA is aware of the effort this represents for the Swiss Portfolio / Trustee market. Those who succeed in the process will be granted with a seal of quality and trustworthiness which this segment did not benefit from before. This seal will be used by FINMA, our Federal Council, numerous Lobbies and Associations (more to come on this point from me soon!) to protect our market and common interest vis a vis competitive markets, thinking load about UK, Singapore, US as well as against reputational damage & unforeseen legal cases. Swiss market will shine and regain the position it deserves, Make Swiss Portfolio Management/ Trustees business great again! Wooh! Best I stop here, I’m getting carried away!

 

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Berclaz & Associés Legal & Compliance is a Swiss company specialising in the Outsourcing / Deputation in Compliance & Risk functions as well as Legal & regulatory advice. Our clients are Family Offices, Independent Asset Managers, Company & Trust service providers, Trading companies and Banks.  Numerous references on request.