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Information for asset managers on the obligation to submit to supervision (Ethics of the Profession)

Implementation of the amended Money Laundering Act

PolyReg addressed the following letter to all members:

Zurich, 16 March 2009

Information to all members

Dear Sirs,

The amended Anti Money Laundering Act has entered into force on the 1st of February 2009. As has been announced on the occasion of the training courses last year, this amendment introduces new duties of diligence, namely the duty to take note of the power given to the representatives of legal entities and the duty to identify these persons in addition to the contracting party (article 3 al. 1 MLA). Furthermore a new duty of diligence has been established, requiring the identification of type and scope of the contractual relationship as intended by the contracting party (article 6 MLA). The duty to report a suspicious act to MROS has been extended, such report being already required when the financial intermediary decides to terminate negociations due to a founded suspicion before concluding a contract (article 9 MLA).

As the new law does not provide for any delay to implement the amended regulations, they become immediately applicable. Until the new FINMA approved PolyReg regulation will become available all members have to implement the new duties of diligence directly based on the law according to their best knowledge and effort. Organisational measures have to be taken until 30 June 2009 at the latest in order to safeguard compliance.

In the meantime PolyReg will do it's best efforts to answer all questions you may have. Some additional (provisional) guidelines are available at (German only).

We expect to be ready to cover all aspects of the new PolyReg regulation regarding the revised duties of diligence in the training courses starting this May. For this reason we suggest, that members book early courses to the extent possible.

Best regards

Matthias Schaad, director

Provisional interim instructions on implementation

In order to implement the new duties of diligence and until new approved PolyReg regulations become available the following instructions apply to members of PolyReg in addition to the regulation in force:

Date of application
These instructions apply from 19 March 2009 and are immediately applicable. An adaptation of existing client files to the new requirements for the identification of legal entities (retrospective application) is not necessary for the time being.

Identification of legal entities and companies
In addition to identifying legal entities and companies as hitherto, members have to identify all natural persons who establish business relationships in the name and on behalf of the contracting legal entity. The legal entity's procuration disposition regarding this person has to be recognized and documented (HR excerpt, power of attorney). If several natural persons are acting jointly (eg. collective signature), the above applies to all of these persons.

Determination of type and scope of the contractual relationship
When entering into a new business relationship, nature and purpose of the business relationship as desired by the contracting party has to be identified (or clarified) and the result has to be documented in a memorandum or note in the customer profile.

The amount of information to be collected depends on the risk involved with the business relationship and shall be adapted to the circumstances, namely considering if nature and scope of the business relationship appear obvious under the circumstances or need further clarification.

Assets of minimal value The new "de minima clause" of Article 7a MLA shall not be applied until new SRO Regulations giving guidance are available.

Duty to report
Suspicion of financing of terrorism is now also requiring a report under article 9 AMLA.

In case negotiations in the process of establishing a new business relationship are terminated due to a reasonable suspicion according to article 9 para 1 letter a MLA a report to MROS must be filed, even if the relationship has not yet been established.

Information after report
If a financial intermediary informs another financial intermediary after having filed a report to MROS according to article 10a MLA, he shall disclose and document that fact in a memorandum.