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Kindly take note the attached spread is in French. Please find the English translations below.

Specialized in financial regulation, lecocqassociate is a law firm that offers innovative solutions to its clients. Having joined the firm in 2016 in Geneva, Lucile Cesareo-Hostettler is now a Partner (lecocqassociate Geneva). In this interview, she presents the challenges of financial regulation.

Question 1: Lucile Cesareo-Hostettler, what are the areas of activity of lecocqassociate and what services does the company offer?

Lucile: In the field of financial regulation, we accompany our clients, financial institutions, from structuring to their whole business life cycle. We also do what is necessary for the authorisation and/or licensing process with FINMA such as: licenses for banks, securities firms, collective or "simple" asset managers in particular and financial market infrastructures such as stock exchanges, multilateral trading systems or trading systems based on Distributed Ledger Technology (DLT).

We also advise foreign clients who are looking to establish themselves in Switzerland or offer financial products in Switzerland. Similarly, we advise our insurance clients in the process of obtaining FINMA approval to conduct insurance, reinsurance or insurance intermediary activities in Switzerland. Our expertise also extends to capital market regulation, such as stock exchange listing rules.

Question 2: In Switzerland, what are the regulatory bodies of the financial sector?

Lucile: The Federal Financial Market Supervisory Authority (FINMA), who has its seat in Bern. FINMA supervises the proper functioning of the financial markets with the protection of investors, consumers and creditors guaranteeing in particular the solvency of its participants. To this end, it has at its disposal the tools of authorisation, supervision and enforcement, i.e. it applies the law of supervision through binding decisions.

Question 3: What are the challenges of financial regulation?

Lucile: The main challenge is preserving Switzerland's reputation of being a safe, strong and attractive financial center for institutions, its players in the sector and investors. This requires regulation and supervision that guarantees an impeccable environment while allowing business to continue its operations. At the international level, this requires Switzerland to adapt to the evolving financial system that is happening on a global scale.

“There is a need for the legislator and regulator to have an in depth understanding of the technical issues in order to come up with solutions in line with the needs of the financial sector and the demand of clients and/or investors.”

Question 4: Have there been any recent updates in the Swiss financial sector?

Lucile: On January 1, 2020, the FinSA (Financial Services Act) and FinIA (Financial Institutions Act) came into force which caused a significant shift of the regulatory system.

The aim was to strengthen the competitiveness of the financial center by enhancing client protection, establishing a level playing field by applying the same obligations to all financial service providers that made asset management companies subject to FINMA supervision. Furthermore, the new Fintech license was introduced with Section 1b of the Federal Banking Act (January 1, 2019) as well as the introduction in the Financial Market Infrastructure Act (FinMIA) of the DLT-based trading facilities, which came into force on August 1, 2021.

In the near future, the amendment to the Federal Act on Collective Investment Schemes will come into force bringing into effect the new Limited Qualified Investor Fund(L-QIF). This is a new type of type of fund for qualified investors only, which will not be available for investors (retail) and will not be subject to authorisation and supervision by FINMA, which in turn, will maintain the Swiss attractiveness of Swiss domiciled funds.

Question 5: What is the impact of the constant evolution of digitalization in finance on regulation?

Lucile: The digitalization of financial services allows for the optimization of services and the advent of new models. It is important to be able to adapt to these new "Fintech" models and to evolve quickly in order to allow industry players to implement new technologies with competitive, legal and technical tools. There is a need for the legislator and regulator to have an in depth understanding of the technical issues in order to come up with solutions inline with the needs of the financial sector and the demand of clients and/or investors.

Question 6: How do you see the evolution of financial regulation in Switzerland?

Lucile: It is to be expected that environmental criteria will be taken into consideration in the future framework of institutions such as disclosure obligations to customers and the prevention of greenwashing. This evolution should be guided by Switzerland's international obligations (such as the Paris Agreements), consider the growing demand of clients, financial providers and financial institutions as well as also by the objective of maintaining a competitive financial center in the development of international and European legislation in this area.

Lucile Hostettler

Lucile Hostettler