Final standards of MiFID II exception for commodity traders

Does your firm trade in commodities derivatives? If so, the publication of the final standards regarding the exemption of ancillary activities and the position limits regime under MiFID II is of importance to you.

MiFID II/MiFIR will generally require that any company trading in commodities derivatives on its own account or on behalf of third parties will need a license as an investment firm as of 3 January 2018. This rule will also affect commodities trading firms domiciled in Switzerland to the extent that they trade in commodities derivatives listed on an exchange domiciled in the EU or conduct OTC trades with a counterparty domiciled in the EU.

There are, however, certain exemptions available to this general license requirement. The most prominent of these exemptions is the ancillary activity exemption. The final technical standards for the criteria to establish whether an activity is considered to be ancillary to the main business under MiFID II/MiFIR were published by the European Commission yesterday. Ancillary activity exemption is granted if the following three thresholds are not exceeded:

        • Overall market threshold: The group’s notional value in speculative positions in the asset classes metals, oil and oil products, coal, gas, power, agricultural products and other products, when compared to the overall market trading activity in each of these asset classes, does not exceed certain thresholds (4% for metals, 3% for oil and oil products, 10% for coal, 3% for gas, 6% for power, 4% for agricultural products, 15% for other products, and 20% for emission allowances).
        • Main business threshold: This test is now comprised of two subtests. The first is still the ratio between the company’s speculative and overall trading activity. A value below 10% means that the test has been passed, a value between 10% and 50% decreases the thresholds mentioned in the overall market threshold test by 50%, and a value above 50% decreases these thresholds by 80%.
        • New – capital employed test: the third test is passed when the estimated capital employed for carrying out the activities (15% of the net position in addition to 3% of the gross position, multiplied by the net price of the derivative) is not more than 10% of the capital employed (total assets of the company minus short-term debt) at company level for carrying out the main business activities.

The European Commission has also published the final technical standards on the position limits on the size of a net position which a person can hold in exchange-traded commodity derivatives and economically equivalent OTC contracts. In other words, there will be position limits for each commodity derivative in each commodity class.

What does this mean for firms trading in commodities derivatives?
If you have not done so already, we recommend starting your MiFID II/MiFIR project now. Compliance with MiFID II/MiFIR will result in (material) changes to your organisation. Synergies can be gained by combining the MiFID II/MiFIR project with projects related to other regulations that are already in force or will soon come into force (such as MAR, FMIA and EU benchmark regulations).

We have had the great fortune to assist many large and smaller commodities trading groups in becoming MiFID II/MiFIR compliant, and we would be delighted to share this wealth of experience with you.

For your free consultation, please contact:

Dr Günther Dobrauz MBA
Partner
guenther.dobrauz@ch.pwc.com
+41 79 894 58 73

Dr Martin Liebi LL.M.
Senior Manager
martin.liebi@ch.pwc.com
+41 76 341 65 43

Private Banking: Switzerland 2016 Conference and Awards

Private Banking Conference: Switzerland 2016 brings together private banks, family offices, independent wealth managers and intermediaries in an active discussion of the key issues facing the industry. The informative and inspiring keynote sessions and informal conversations provide setting for you to join other high-profile event guests in engaging discussions. Key industry thinkers and doers will meet to debate the importance of a new kind of strategies, business practices and partnerships in the industry to meet the challenges of implementing innovative technological solutions.

This conference asks important questions about Switzerland’s position among the global wealth capitals. Speakers, participants and partners examine the key industry trends and discuss and find practical solutions to the most pressing industry questions:

  • How is the regulation driving the change in the industry practices?
  • How are industry leaders tackling new challenges in the converging market conditions?
  • How to meet the demands of a new generation of tech-savvy investors?
  • What the latest Strategies are in cross border and offshore wealth management?
  • How to best engage with family owned banks and offices?
  • How is the Industry landscape changing in Switzerland?
  • How has the role of the relationship manager developed?
  • How to develop you organisation’s talent to nurture future-proof skills and knowledge?
  • How can Swiss banks keep up with the technology revolution?

PwC’s speech and panel session: 14:40-15:00: Data as a Differentiator

  • Data capabilities that you need to enable your digitalisation program
  • Regulatory and data protection constraints and how to overcome them
  • Case studies: conduct risk, single client view, customer insights, advanced methods

Professional background 

Christian is a former space scientist, and today the responsible Partner for Data & Analytics at PwC Switzerland. In his 15 years as management consultant he helped many banks to better manage data and IT, and to exploit their information assets. His work covers all aspects of the information lifecycle from business analysis and requirements capture, data strategy, data quality, data governance through to the design, build and operation of sophisticated analytical systems. He has worked for many large and smaller banks on national and international level in the area of compliance, risk, fraud, audit, operations and customer experience.

Register here

Are your supplies of blood plasma VAT exempt?

FinanzForum_2015_v2Recent developments related to blood plasma supplies in the EU and a comparison to the Swiss VAT treatment

Does human blood plasma fall within the scope of the VAT exemption applicable to blood?

  • In the European Union (EU)

On 5 October 2016, the Court of Justice of the European Union (CJEU) issued its decision to a German case (C-412/12, TMD) 1, in regards to whether the supply of blood plasma used for manufacturing of medicinal products should be VAT exempt or not.

With its decision CJEU, confirmed that although not explicitly listed in the EU VAT Directive’s 2 article, which provides for the VAT exemption of supplies of blood and human organs 3, the supply of plasma derived from human blood falls under the exemption, but only when the plasma is actually intended for direct therapeutic use.

Additionally, CJEU ruled that where the human blood plasma is intended to be used for the manufacture of medicinal products (i.e. plasma intended for industrial use) it should be subject to VAT. In this latter case, the question remains “Which VAT rate applies – the standard rate or the reduced rate?” The answer to this question depends on the national VAT rules of the country where the blood plasma sale, intra-community acquisition or import takes place.

  • In Switzerland

Swiss VAT law provides for a VAT exemption of supplies of blood and human organs 4; however, only the supplies of whole blood by persons possessing the required license are eligible to the VAT exemption.

Therefore, the supply of blood plasma, which is a component of human blood, but does not qualify as whole blood itself, is subject to Swiss VAT. Such an interpretation has been confirmed by the Federal Tax Authority (FTA) in their written guidelines.

The FTA has also confirmed that if the human blood plasma can qualify as “medication” 5, then the reduced VAT rate of 2.5% applies.

zentralschweizer_spitalapero

Implications your business should consider

As the CJEU’s decision becomes directly applicable legislation in all EU member states, it is expected that the CJEU’s decision would trigger changes to the current tax authorities’ practices in some countries, particularly with respect to the VAT treatment of blood plasma for industrial use.  This new EU legislation would mainly affect the specialized laboratories selling blood plasma, the pharmaceutical companies using plasma for the manufacture of medicinal products, as well as the intermediaries involved in the supply chain.

In view of the above, if you are involved in transactions with blood plasma (as either a supplier or a purchaser) it is recommended that you continue to monitor for local country developments triggered by the TMD case (C-412/12), and assess the impact of the CJEU’s decision in the light of both the EU and local legislation applying to your current supply chain.

We have provided a list of impacts/actions to consider, depending on your role in the plasma transaction (supplier/customer/intermediary), in the detailed PDF below:

PlasmaNews_Thumbnail_28.11.16

 

Download the PDF here: Are your supplies of blood plasma VAT exempt?

 

 

If you would like to discuss the above in more detail and assess the implications for your business, please do not hesitate to contact us.

Patricia More
Partner, Indirect Tax
PwC Geneva
patriciat@ch.pwc.com
+41 58 792 95 07

Sandra Ragaz
Indirect Tax Leader for Pharma & Life Science in Switzerland
PwC Zurich
sandra.ragaz@ch.pwc.com
+41 58 792 44 69

Gergana Chalakova
Manager, Indirect Tax
PwC Geneva
gergana.chalakova@ch.pwc.com
+41 58 792 92 02

1 C-412/15 (TMD Gesellschaft für transfusionsmedizinische Dienste mbH v Finanzamt Kassel II – Hofgeismar)
2 Directive 2006/112/EC
3 The VAT exemption on blood is laid down in Article 132(1)(d) of Directive 2006/112/EC.
4 The VAT exemption on blood is laid down in Article 21(2)(5) of Swiss VAT Law of 12 June 2009.
5 Definition of “Medication” is provided with Article 49 of the Ordinance to the Swiss VAT Law

Pitfalls and challenges during solution evaluations

What to watch out for when evaluating new (IT) solutions

In today’s rapidly changing environment, virtually no stone is left unturned. This means that every business is undergoing an ongoing transformation process and constantly adapting to stay competitive and compliant. Organizations need to transform for a variety of reasons, for example:

pitfall_en

With the following brief white paper, which is based on our professional, cross-industry experience, we would like to provide insights into the key pitfalls and challenges that can arise during solution evaluations.

Download the paper here.

PwC and Dathena announce strategic alliance to help organisations improve data governance and security

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Yan Borboën – PwC – Partner, Cybersecurity and Philippe Eyriès – Dathena – Chairman of the board

This alliance combines PwC’s cybersecurity and data protection services and expertise with Dathena’s unique data governance software to improve data classification, security anomaly detection, and the protection of sensitive and personal information.

As organisations wake up to the huge potential of digital transformation, they’re also becoming alert to the need for cybersecurity. Put simply this means safeguarding your most critical information by detecting, responding to and resolving threats resulting from mismanaged or unsecured sensitive data. An unavoidable part of this process is the ability to keep track of this data. The trouble is that large and medium-size organisations are struggling to identify and classify the tremendous amount of unstructured electronic data they generate and store.

Until recently the information security systems available in the marketplace weren’t keeping up with the rapidly changing business needs and regulatory requirements in this area. But for us at PwC this was a vital piece of the cybersecurity jigsaw, so we kept searching. We had a fairly tough set of requirements, including:

  • A pragmatic, non-intrusive and technology-agnostic solution enabling us to automate and improve our data governance services,
  • An approach to help us reduce our clients’ financial exposure and risk of reputational damage, and reinforce their knowledge of where their critical data reside,
  • A framework to facilitate compliance with regulations such as EU GDPR or FINMA.

Dathena steps in

“After intensive discussions with Singapore- and Switzerland-based software company Dathena, we knew we’d found a partner that would enable us to achieve these goals. Their data governance platform, Dathena 99, will revolution our data governance offering” said Yan Borboën, Partner at PwC Switzerland. Dathena has been able to combine machine learning technology with industry information security experience and best practices to develop what they believe to be the most innovative and accurate data governance and security platform − which is focused entirely on the needs of the customers and fits perfectly with risk managers, compliance, and the concerns of data protection officers. Importantly for us, it can also be interfaced with existing governance, risk management, and compliance (GRC) tools, data labelling plug-ins, and Data Loss Prevention (DLP) solutions.

“With 10 years of experience in the security industry, I was frustrated that information security solutions were not keeping up with the ever changing business needs and regulatory requirements. Spotting an opportunity to combine machine learning technology with industry information security experience and best practices, Dathena 99 was created,” said Christopher Muffat, Founder and CEO of Dathena.

State-of-the-art strategic alliance

The result is a brand-new strategic alliance combining the PwC Digital Services’ multidisciplinary capabilities in digital strategy, transformation, experience and design, data analytics and cybersecurity, and Dathena’s innovative and accurate data governance solution − using cutting edge machine learning and artificial intelligence technologies. In concrete terms this means we at PwC have decided to create a Centre of Excellence (CoE) for Dathena 99 in Switzerland. The CoE will allow PwC to acquire the expertise to deliver best-in-class services anywhere in the world.

“We are very pleased to partner exclusively with PwC to bring our solution to the market. This will allow us to focus our efforts on delivering the best data governance platform, with new ideas and product enhancements. PwC will also help ensure that Dathena’s solutions are designed with the client’s needs at the forefront of all our decisions,” said Philippe Eyries, Chairman of Dathena and former Chairman of Nexthink.

We’re very excited about this new alliance, which we believe will allow us to continue serving our clients with the best data governance and security services available. If you want to know more about our partnership, please join us at our events in Geneva and Lausanne:

Dathena Events

About PricewaterhouseCoopers

PwC Digital Services combines multi-disciplinary capabilities in digital strategy, transformation, experience and design, data analytics and cybersecurity to help clients with all aspects of their digital transformation. Our cybersecurity services enable the transformation to digital with security, data protection and regulatory consultancy and help clients secure their digital infrastructures and processes against sophisticated cyber threats and provide aid if a data breach occurs.

We are a network of firms in 157 countries with more than 223’000 people who are committed to delivering quality in digital services, assurance, advisory, and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com

PwC refers to the PwC network and/or none or more of its member firms, each of which is a separate entity. Please see www.pwc.com/structure for further details.

About Dathena

Dathena is a Singapore and Switzerland based software company that develops a web-platform dedicated to improving data governance and security. Dathena is the most innovative and accurate data governance solution and is the only one using cutting edge machine learning and artificial intelligence technologies. Dathena serves the Global 500 through our exclusive strategic alliance with PwC.

Dathena® is a registered trademark of Dathena Ltd. and Dathena S.A. To learn more, visit http://www.dathena.io

PwC’s CEO Survey: Who’s at the table? The C-suite and 20 years of Change.

20th CEO SurveyFor the 20th anniversary of PwC’s CEO Survey, we look at the evolution of the C-suite over the past 2 decades.

In the run-up to the 20th anniversary of our global CEO Survey, we’ve been reflecting on how the roles of the CEO and the team they lead have changed in that time. CEOs are often said to have the loneliest job in business. Yet arguably they are less lonely today than they were 20 years ago. That’s because the C-suite has significantly grown in size and changed in composition in the two decades since PwC’s CEO Survey began.

Read the whole article of Richard Oldfield, PwC Global Markets and Services Leader.

NPO Breakfast Autumn 2016

Are you well prepared for the changes to come?

 
Switzerland, and more specifically Geneva, is an important global hub for international not-for-profit organisations (NPOs). They play a vital role in key humanitarian activities worldwide. In spite of the importance of this work, which benefits a growing stakeholder community, these organisations can find themselves confronted with a number of challenges in an increasingly complex environment.

This year, we carried out a Not-for-Profit Excellence survey among some 150 Swiss organisations to take the pulse on economic, financial, governance and operational challenges the NPO community faces. We will present the key findings of this second edition during our breakfast. We believe that this report will serve as a key reference for directors and staff at all levels at a variety of entities. We hope that it will help NPOs to identify and harness opportunities for improvement.

The breakfast will provide a great opportunity to meet with NPO experts and peers encountering similar issues. If you would like to attend please register, as the number of participants will be limited.

We look forward to meeting you over breakfast!

Pharma & Life Science Hot Topics

Has a health authority prohibited the sale of your pharmaceutical products in Europe, because you are a Swiss established company?

Sale of pharmaceutical products within the EU by non established companies – background

  • Recent developments show that health authorities increase audits and prevent the sale of pharmaceutical products within the EU by companies located outside of the EU, if they do not have a correct wholesaler license in place.
  • Legal basis: The pharmaceutical legislation, Art. 76 of the directive 2001/83EG, the anti-counterfeiting directive 2011/62 and correspondent legal acts implemented in 2015 in different EU member states
  • Consequences/major challenges:
    • Restructuring the current Swiss business model
    • Significant changes in the supply chain
    • Direct and indirect tax implications in Switzerland and in the European Union
    • ERP system and contract adaptions
    • Etc.

Pharma & Life Science Hot Topics: Sale of pharmaceutical products within the EU by non established companies

Key questions
Is your pharmaceutical company established in Switzerland?, Do you sell pharmaceutical (end-) products/drugs in the EU?, Is the wholesaler license used issued on the name of another company than that one that sells the products in the EU?

PwC’s solution
If the answer of all three key questions is yes, we recommend to have your business reviewed and optimized. We have developed a pragmatic solution that works in practice from a regulatory, direct and indirect tax as well as legal perspective –in line with local Swiss and European regulations.

Call for action / Your benefits
We would be pleased to discuss further with you and offer a solution that is perfectly customized to your requirements and needs, in order to ensure a smooth, cost efficient and compliant sale of pharmaceutical products in the EU.

PwC Pharma & Life Science Tax Hot Topics

Download here the publication in PDF version: Pharma & Life Science Tax Hot topics

 

 

Sandra RagazSandra Ragaz
Director, TLS
+41 58 792 44 69
sandra.ragaz@ch.pwc.com

Customs and International Trade

As you may have noticed, some changes will become applicable to the Harmonised System (HS) and subsequently to the Swiss Nomenclature (customs tariff) as well as to the EU Combined Nomenclature (CN) as of 1 January 2017. This includes the classification of pharmaceutical products of chapter 30:

Swiss Nomenclature

Swiss Nomenclature

EU Combined Nomenclature (CN)

EU Combined Nomenclature

Although the import of these products in Switzerland and the EU is still duty free, we recommend to check the classification of your products and makes changes/ amendments where needed. Should you need our assistance with (re)classifying your products, we are of course happy to help you.

PwC Customs & International Trade 2016

 

Download here the publication in PDF version: Customs and International Trade 2016

 

 

 

Sandra RagazSandra Ragaz
Director, TLS
+41 58 792 44 69
sandra.ragaz@ch.pwc.com

ChrisChristina Haas Brunitina Haas Bruni
Senior Manager, TLS
+41 58 792 51 24
christina.haas.bruni@ch.pwc.com

Eine weitere EU-Richtlinie, die einen massiven Einfluss auf Schweizer Finanzinstitute hat – die Wohnimmobilienkreditrichtlinie

Die Wohnimmobilienkreditrichtlinie (WIKR), auch als Mortgage Credit Directive (MCD) bekannt, trat am 20. März 2014 in Kraft und ergänzt die bereits bestehenden Richtlinien zum Konsumentenschutz, zur irreführenden und vergleichenden Werbung sowie zu unlauteren Geschäftspraktiken im Bereich der Wohnimmobilienkredite.

Die WIKR hat einen umfassenden Geltungsbereich und gilt auch für Nichtkreditinstitute. Dies umfasst auch den Vertrieb von Versicherungs- und Rückversicherungsprodukten und betrifft alle Kreditgeber sowie Kreditvermittler, die bestimmte Kredite an Verbraucher gewähren.

Die Mitgliedstaaten mussten die WIKR bis zum 21. März 2016 in nationales Recht und Vorschriften umsetzen. Nicht alle EU-Mitgliedstaaten sind dieser Pflicht nachgekommen. So haben Kroatien, Zypern, Finnland, Griechenland, Luxembourg, Portugal, Rumänien, Slowenien, Spanien und Schweden noch keine Umsetzungsbestimmungen publiziert. Belgien, Lettland, Litauen und Polen haben erst Teile der Umsetzungsbestimmungen publiziert.

Nichtsdestotrotz müssen betroffene Kreditgeber seit dem 21. März 2016 den Anforderungen der WIKR entsprechen. Die WIKR wirkt sich auch auf Schweizer Kreditinstitute und Nichtkreditinstitute aus, die Kredite im Sinne der Richtlinie an in der EU / im EWR domizilierte Verbraucher oder an in der Schweiz domizilierte Kunden mit dem Zweck des Erwerbs einer Liegenschaft in der EU / im EWR erteilen.

Lesen Sie mehr dazu.