The countdown is on: one year to get ready for the EU General Data Protection Regulation GDPR

On 25 May 2016 the EU General Data Protection Regulation (GDPR) entered into force. After the elapse of the 2-year transposition period, it will become directly applicable on 25 May 2018.

The new EU data protection legislation introduces substantial changes for companies dealing with personal data: As a selection, the new requirements on transparency, on proportionality as well as on documentation when processing personal data are among the key changes. These are significant challenges for companies. In addition, the new legislation substantially improves the rights of the concerned individuals – the data subjects. Thanks to the GDPR, they now have clear-cut rights with regard to companies processing their data. Inter alia the key rights include the right on information, on rectification and deletion of personal data, on restriction of processing, on portability as well as the right to object processing. As data controllers, companies have to be able to comply with all these rights.

Besides new duties and compliance obligations for companies, data protection authorities are given new competences and enforcement instruments. Standing out are the new sanctions of up to the amount of EUR 20m or 4% of the international annual turnover of the concerned company, whichever is higher.

Recommendation

Swiss companies that (e.g. because they do business in the EU) are subject to the GDPR now have one year to make the necessary adaptions to comply with the GDPR. The new requirements are to be analyzed, gaps to be identified and mitigation actions to be planned and implemented. It is important to be prepared.

Contacts:

Susanne Hofmann
Legal Compliance Leader
+41 58 792 17 12
Email

Michael Adrian Meyer
Legal Services – Senior Manager
+41 58 792 51 31
Email

Reto Häni
Partner and Leader Cybersecurity
+41 58 792 75 12
Email

Idir Laurent Khiar
Legal Services – Assistant Manager
+41 58 792 17 51
Email

Prospects for Future Economic Cooperation between China and Belt & Road Countries

The Belt and Road Forum for International Cooperation (BRF) was held in Beijing from 14 to 15 May 2017. According to China’s Ministry of Foreign Affairs, 29 heads of states and governments attended the highest level of international conference held by China since the major initiative was put forward by President Xi Jinping in 2013. Economic cooperation is expected to be the top priority of this forum. So which areas are likely to achieve breakthroughs?

In our latest PwC analysis on the B&R initiative, Prospects for Future Economic Cooperation between China and Belt and Road Countries, we look at how the B&R initiative is reshaping the future economic cooperation between China and B&R countries.

Here are the major future prospects for economic collaboration between China and B&R countries:

  • Signing free trade agreements may be the most effective way for China to expand its trade with B&R countries
  • Opening up stock and bond markets for B&R countries will provide more investment opportunities for Chinese business
  • Promoting RMB internationalisation in major B&R economies rather than in the developed countries is more likely to be successful
  • Domestic preferential policy support will be critical in encouraging Chinese companies to invest more in the B&R countries

Read Attachment

Live PwC IFRS 17 webcast

IFRS 17 is coming – Why should you care about it?

In May 2017, the IASB will be finalising its long-standing project on insurance accounting and publish IFRS 17.

As an insurer, you will need to apply IFRS 17 for annual periods beginning on or after 1 January 2021. IFRS 17 will fundamentally change the accounting for all entities that issue insurance contracts and investment contracts with discretionary participation features.

Join our live webcast on IFRS 17, ‘Insurance Contracts’, on 31 May 2017 when we’ll be joined by Darrell Scott, an IASB board member. During the webcast you’ll get:

  • An overview of the accounting requirements
  • Practical issues that your organisation should consider in relation to IFRS 17
  • Expected implementation challenges

Webcast details

Date: Wednesday 31 May 2017

Time: 11:00 (GMT + 01:00)

 

Registration

You will receive a link to join the webcast from Alex Bertolotti, our Global IFRS Insurance Leader, nearer the time.

Contact

Patrick Maeder
Partner – FS Advisory
PwC Switzerland
+41 58 792 4590
maeder.patrick@ch.pwc.com

Switzerland: New social security treaty between Switzerland and China

A social security treaty between Switzerland and the People’s Republic of China (China) will enter into force on 19 June 2017. The maximum posting period is 72 months. For the duration of the posting employees (regardless their nationality) are exempt from the compulsory insurance obligations of the country of occupation which are covered in the social security treaty. As from 19 June 2017 it will be possible to obtain a Certificate of Coverage.

 

Click here for more details

 

Contact

Véronique Schaller
+41 58 792 5036
veronique.schaller-wiesli@ch.pwc.com

Natalia Graf
+41 58 792 4324
natalia.graf@ch.pwc.com

 

Corporate access: a MiFID 2 sideshow that might yet cause a headache for asset managers

Brokers provide asset managers with trade execution and corporate access. The latter comprises meetings between executives of listed corporate and institutional investors, mostly in the form of so-called non-deal roadshows. Many investment professionals consider these meetings to be a crucial part of their investment process.

Hitherto asset managers paid the brokers for all these services via a ‘bundled’ fee for trades. The trading costs are directly charged to the funds, i.e. paid directly out of the assets of the investors. The sums involved here are significant.

MiFID 2, applicable as of January 2018, generally aims for increased transparency and improved consumer protection. Part of this is a massive push for unbundling, whereby asset managers have to pay separately for trading, research and corporate access. The rules with respect to corporate access are, however, still somewhat murky.

Read the full report

Please do not hesitate to contact us.

Dr. Guenther Dobrauz
Partner
Legal FS Regulatory and Compliance Services
+41 58 792 23 25
guenther.dobrauz@ch.pwc.com

Michael Taschner
Senior Manager
Legal FS Regulatory and Compliance Services
+41 58 792 23 25
michael.taschner@ch.pwc.com

Orkan Sahin
Senior
Legal FS Regulatory & Compliance Services
+41 58 792 1994
orkan.sahin@ch.pwc.com

Dr. Kilian Maier
Interaction Partners AG
CEO / Co-Founder
+41 76 570 11 60
kilian.maier@interactionpartners.ch

 

Update on the Financial Market Infrastructure Act (FMIA) for small non-financial counterparties (NFC-)

On 1 April 2017, the Swiss regulator authorised and recognised Regis-TR S.A. and SIX Trade Repository AG as the first trade repositories accepted for purposes of fulfilling the reporting obligations under the FMIA. With this, the picture has become far clearer. Swiss companies are now able to decipher a concrete timeline of the performance obligations which apply to them.

Compliance with the law is subject to audit for financial years beginning on or after 1 January 2017. If your organisation requires assistance in establishing your compliance with the law, our experts stand ready to assist you.

Download the full report here

Contact

Stefan Wüest
Treasury Solutions – Basel / Zurich
058 792 5951
stefan.wueest@ch.pwc.com

China comes to Weggis – PwC experts on site

China Firm Roadshow

Many Swiss companies have a business presence in the China market – are you one of them? Our PwC colleagues from the People’s Republic of China will present their views and analyses on the general business environment, changes in the tax regime and transaction trends.

China is going digital at a faster speed than most countries, and many foreign
companies use digital channels to approach their customers in China. China’s new Cyber Security Law will have far-reaching consequences for any company that has operations in China, foreign companies included. Our experts will highlight the key regulatory and tax-related changes that may affect your company as well.

Chinese investors have become increasingly present in Switzerland. In the concluding panel of this PwC event, experts from different industries will discuss the burning questions such as what Chinese investors are looking for in Europe, how they will manage the newly acquired companies, and what possible implications there are for Swiss businesses.

We would like to discuss these topical issues with you in a one-to-one meeting and on our China Weggis Event.

Dates

China Weggis Event: Wednesday, 31 May 2017

One-to-one meetings: 29 – 31 May 2017

Click here for more details

Registration

Please register online for the event and the one-to-one meetings:

Online registration

Contact

Felix Sutter 
Head Asia Business Group
SCCC President
Partner PwC
+41 58 792 2820
felix.sutter@ch.pwc.com

Stefan Räbsamen
Partner PwC
+41 58 792 2622
stefan.raebsamen@ch.pwc.com

 

Latest Level 3 ESMA Q & As related to MiFID II/MiFIR

ESMA published and updated in the last couple of days additional Level 3 Q&A papers. Due to the specification and clarification purposes of the Level 3 papers, this should help you during the implementation phase and could clarify open questions. Please find the relevant April 2017 Q&As below.

PwC provides you with this Newsletter an overview of the latest questions related to the following topics:

  1. Transparency
    – Best execution
    – Inducements
  1. Market Structure
    – Direct Electronic Access (DEA) and algorithmic trading
    – Multilateral and bilateral systems
  1. Data Reporting
    – Field 23 – Seniority of the Bond
    – Business Case: Inflation Indexed Bond
    – Transaction reporting

Read the whole article.

We are happy to discuss with you any thoughts and issues or are happy to review your solutions with regard to MiFID II and MiFIR.

Please do not hesitate to contact us.

Guenther Dobrauz
Partner
Legal FS Regulatory and Compliance Services
+41 58 792 23 25
guenther.dobrauz@ch.pwc.com

Michael Taschner
Senior Manager
Legal FS Regulatory and Compliance Services
+41 58 792 23 25
michael.taschner@ch.pwc.com

Turkey: changes in relation to the Electronic Record Keeping Requirements and e-invoicing

Electronic Record Keeping Requirements

The Turkish Revenue Administration (TRA) has introduced the Electronic Record Keeping Obligations by issuing the Tax Procedural Law General Communique no. 431 on 29 December 2013. As a result, since 1 January 2015 certain Turkish taxpayers (from petroleum and tobacco products market) are obliged to create and keep their records in one of the certain formats (xls, xlsx, txt, csv or xml). The application of the requirements relates to sales, purchase, inventory, import, export, production and other records. The Turkish Tax Authorities can request the files with the records in certain format in case of the audit.

E-invoicing

In March 2010, Tax Procedural Law General Communiqué no. 397 was officially published and e-invoicing became available in Turkey. Later, with the publication of Communiqué no. 421, taxpayers with a gross sales revenue of 10 million TL and above for 2011 or onwards accounting period, taxpayers that import or sell petrol products, alcoholic beverages and tobacco products are mandated to comply with this application.


Download the full report here.

 

Contact

Kinga Zawora
PwC Zürich
+41 58 792 2262
kinga.x.zawora@ch.pwc.com

Consequences of the 2020 Pension Scheme Reform (AV2020) on comprehensive pension plans

1. Initial position

On 17 March 2017 Parliament approved the 2020 Pension Scheme Reform (AV2020). It contains an extensive package of actions in the 1st and 2nd pillar, with the aim of ensuring financial stability and maintaining the previous pension level. The reform is to come into force in 2018 and is expected to be submitted to the public for voting on 24 September 2017.

2. Basic information

The changes to occupational benefits in AV2020 are as follows:

  • Retirement age: increasing the retirement ‘reference’ age for women from 64 to 65 and increasing the earliest possible retirement age from 58 to 62 in general (exceptions possible).
  • Retirement conversion rate: gradual reduction of the minimum conversion rate from 6.8% to 6.0% over 4 years, starting after 31 December of the year when AV2020 comes into force (we expect from 1 January 2019).
  • Insured salary: increase due to the reduction of and additional flexibility in the coordination offset, which equals 40% of the pensionable salary according to BVG. In addition, the coordination offset cannot be less than the minimum AHV/AVS pension and not more than 75% of the maximum AHV/AVS pension (also expected from 1 January 2019).
  • Saving credits: increase in saving credits by 1% of the insured salary for BVG minimum plans from ages 35 to 54 (also expected from 1 January 2019).
  • Transition generation: guaranteed benefits will be calculated according to current law for plan members aged 45 and over with the measurement date one year after the AV2020 comes into force. These will be financed by subsidies from the BVG Security Fund.
  • Continued insurance from the age of 58 on termination: if the employee has to exit compulsory occupational benefits due to termination of employment by the employer, the plan member can continue his / her previous insurance on request.

3. Challenges for comprehensive pension plans

Not all measures of the reform have the same relevance for all pension plans, with ‘comprehensive’ plans providing benefits higher than the legal minimum. The portion of the over-mandatory account balances is key in this context. The AV2020 will not necessarily result in higher contributions for the employer and the plan members within a comprehensive pension plan. Nevertheless, various challenges arise for comprehensive pension plans:

  • Retirement age: the new reference age for women and an adjustment to the early retirement age seem to be a top priority. As a result, the target level of benefits for women is being re-adjusted, which can also lead to an adjustment of the plan’s conversion rates for women.
  • Insured salary / saving credits: The increase of the compulsorily insured salary and saving contributions reduces the over-mandatory portion of the plan member’s account balances. If the saving process remains unchanged an additional reserve or funding of termination benefits may be required under certain circumstances.
  • Conversion rate: the reduction of the minimum retirement conversion rate increases the over-mandatory portion of the retirement pension. This increases the potential for a reduction of the plan’s conversion rates, particularly in plans with a small portion of over-mandatory account balances.
  • Transition generation: by granting the minimum retirement pension according to current law, an additional BVG shadow calculation for plan members of the transition generation might be required (details to be determined by the Federal Council). Again, this increases the complexity of occupational benefits and requires additional efforts in technical administration (one-off: adjustment of systems; ongoing: settlement subsidies from Security Fund BVG).
  • Continued insurance from age 58 on termination: under the aforementioned conditions pension funds will be obliged to provide external insurance on request. The contribution processing (saving if continued, as well as risk and cost contributions) is no longer handled by the employer but by the plan member. As a result, this means additional work for the pension funds. For instance, pension funds may have to deal more with outstanding contributions from such plan members.

In addition to these challenges, further innovations will emerge for pension plans, where the application in practice is unclear. This includes the newly created legal basis in Art. 17 FZG: it will be possible to deduct a contribution to fund actuarial losses at retirement from the relevant employee contributions when calculating the minimum termination benefit. Such an ongoing premium to fund actuarial losses at retirement has so far not been explicitly foreseen in the funding procedures of the 2nd pillar.

It is not certain that there will be a referendum on the entire AV2020, as only the increase in value-added tax to the additional funding of AHV is in general subject to the obligatory referendum. Either way, it is unpredictable how the reform will be accepted by the public. The advantages of the 1st pillar and the advantages of the 2nd pillar social security clash with each other. Nevertheless, in our view, a board of trustees or pension committee for comprehensive pension plans can no longer ignore the reform in strategic decisions on the pension plan setup.

Contact

Richard Köppel
Pensionskassen-Experte SKPE, Poeple and Organisation
+41 58 792 11 72
richard.koeppel@ch.pwc.com

Markus Schneeberger
Director, People and Organisation
+41 58 792 56 45
markus.schneeberger@ch.pwc.com