SCANNING 5

What’s in there? In Switzerland, IIM who do not qualify as banks or assets managers of Swiss or foreign collective investment scheme according to the Collective Investment Schemes Act (“CISA”) are not subject to licensing requirements. In accordance with the proposed FinIA, an IIM is a person who, based on a mandate and in the name and the account of cli- ents, professionally manages assets or has access to clients’ assets in an another way. The proposed FinIA provides for a general obligation for those IIM to obtain a licence and establishes a prudential supervision regime for such managers. Moreover, in the view of obtaining a licence, the IIM have to fulfil extensive requirements associated with their activities. The granting of the authoriza- tion for an IIM will be subject to the obligation of having for example an adequate organisation in place, an internal risk control system and sufficient financial guarantees or purchase professional in- demnity insurance. It shall be noted moreover that the transitional pro- visions provide for an exception to the licensing ob- ligation that applies to existing IIM with at least 15 years of experience as asset managers (grandfa- thering clause) and under the condition that they do not accept any new client.This “the minimis” clause is probably not of great functional importance since most of the IIM would not accept to limit their busi- ness only to existing clients. This crucial change will mark the end of the Swiss peculiarity in the financial industry in the asset management field. Finally, if the FinIA is implemented as currently pro- posed, IIM will be facing substantial costs in order to comply with the FinIA requirements. In particular, for those asset managers with a little structure (fre- quently just one or several persons at a given firm) this involves additional time and massive expenses that will be difficult to support. This will most proba- bly impact the overall market, with a part of the IIM being forced to leave the business or the merger of the IIM. The Swiss Federal Council justifies its pro- posal for an increased regulation of asset managers by offering a better client protection, as well as en- suring an equal treatment of financial service pro- viders (level playing field). In addition, the proposed draft of the LEFin will allow market access of Swiss financial services providers to EU, as the FinIA will permit them to comply with MIFID II.

The financial institution will submit their FATCA re- turns on or before the 30 th June each year through the Revenue online ROS portal. In the event that there are minor errors in the return, the Internal Revenue Service will contact Revenue who will in turn contact the relevant financial institution to ob- tain the required information. Clarification is provided on the role of the Respon- sible Officer noting that, in a Model 1 Jurisdiction such as Ireland, the US concept of Responsible Of- ficer is not invoked. Irish financial institutions do not need to appoint a Responsible Officer when regis- tering for a GIIN and instead are required to appoint a point of contact only. A reporting financial institution can rely on third party service providers to fulfil its obligations under FATCA. However, the reporting financial institution is ultimately responsible for ensuring that they are compliant with the applicable regulations. What’s next? Financial Institutions will have to ensure that all rel- evant due diligence and reporting requirements are met in preparation for the first reporting date of 30 June 2015. All financial institutions should ensure that they have registered for a GIIN before the 1 st January 2015. SWITZERLAND Potential impact of the proposed new regulation: Financial Institutions

The FinIA’s consultation period ended on October 17, 2014. FRANCE Modification of

Books II and V of the AMF General Regulation Background

Law 2013-672 of 26 July 2013, regarding Sepa- ration and Regulation of the Banking Activities in- troduced into the Monetary and Financial Code the Article L.621-8-4, which specifies that “the AMF can be communicated, by the people or the entities mentioned in II of Article L.621-9, any document or information, whatever the support is, useful for the exercise of its monitoring and surveillance mis- sion”. The French Financial Markets Authority (“the AMF”) adapted accordingly its General Regulation. What’s in there? On 23 September 2014 has been published in the Official Journal of the French Republic (“the JORF”) the Ordinance of 15 September 2014 which approves the amendments made to the AMF General Regulation concerning the transmission to AMF by management companies of data relative to the composition of UCITS and AIFs portfolios they manage. The AMF, after consultation with the Banque de France, said this provision will not add any extra constraint on management companies. Submission to the Banque de France by management compa- nies of portfolios data for the purpose of monetary statistics will allow the management companies to consider as fulfilled their obligation of portfolio transmission as required by new Articles 314-98 and 319-26 of the AMF General Regulation. These provisions came into force on 6 October 2014.

Act (“FinIA”) for “independent”

investment managers. Background

THE ORDINANCE OF 15 SEPTEMBER 2014 IS AVAILABLE HERE.

As mentioned in Scanning N°4 (October 2014), the proposed FinIA represents a fundamental and pro- found set of reforms to the Swiss financial centre. One of the most significant change in this new draft law concerns “independent” investment managers (“IIM”). Indeed, the foreseen FinIA expects all asset managers to be subject to prudential supervision.

page 8 - Scanning - November 2014