UBS/PwC Billionaires report: The changing faces of billionaires

UBS/PwC Billionaires report reveals female billionaires outpace males

 

UBS Group AG and PwC have launched their joint deep dive report, The changing faces of billionaires”, which explores the role of women in building lasting financial legacies and how wealth is preserved across multiple generations.

The report’s findings, which build upon UBS/PwC’s 2015 Billionaires Report released last May, “Master architects of great wealth and lasting legacies”, revealed that the number of female billionaires is growing faster than the number of their male counterparts. Women have been controlling greater average wealth than men and becoming more influential in family businesses, philanthropic enterprises and governance. The report also highlights the fleeting nature of great wealth, finding that only 126 billionaires or 44% of the class of 1995 are billionaires today. It underscores the strategies these prevailing billionaires have employed to build and preserve lasting legacies.

Find more Information here.

Cybersecurity: Customer trust in light of upcoming regulation

Results of a current survey

A survey released in December by security vendor Gemalto found that

  • 75% of the participants didn’t think the protection of their data was taken seriously by firms
  • 64% of the participants said that, if financial or sensitive data was stolen, they would end the business relationship
  • 31% of the participants were already victims of a data breach
  • 23% of these victims considered legal action as a result

Further, PwC’s 2016 “Global State of Information Security Survey” (GSISS) survey showed, compared to last year’s report,

  • 38% more security incidents, and
  • 56% rise in Intellectual Property theft cases

Even if you view such surveys critically – as I do – they show a tendency and a reason for action. It makes sense to define and implement appropriate and effective Cybersecurity measures.

 

EU Strategy 2020

Already in 2010 the European Union defined the basics: 1 “Digital Single Market” and 3 “Trust and Security” of their 2020 strategy set out the activities and measures needed to increase trust in IT services and the security of data and critical infrastructure. The 2012 Eurobarometer of Cybersecurity showed that 38% of all Internet users made online payments.

Two of these activities were to revise the European General Data Protection Regulation (GDPR) and provide a better Network and Information Security (NIS). The trilogue meetings for NIS ended on 8 December 2015 and on 15 December 2015 for the GDPR. We anticipate that the counsel and the EU Parlament will adopt and enact both regulations in 2016.

 

NIS / EU Cybersecurity Directive

The NIS / Cybersecurity Directive Guideline envisages „measures to safeguard a high common network and information security” – stipulates that public confidence should be increased by:

  • Increase the preparedness of the Member States through e.g. development of national NIS strategies and authorities
  • Improved cooperation and coordination among Member States
  • Establishment of national Emergency Response Teams (CERTs)
  • Definition of binding safety requirements for public administration and operators of critical infrastructure in the Energy, Transportation, Banking, Financial Market sectors, Internet Service Providers and Exchange points, Food distribution and Health providers.

These industries will now be required to take appropriate steps to identify security risks and treat them accordingly, and to report serious security incidents to the appropriate authorities. This would affect all service providers in and to the EU.

The national authorities would be allocated appropriate powers of enactment and enforcement. Their mandate would enable investigations of fraud including demanding evidence of an effective implementation of their security policies, for example, by reports of an independent body. Further, member states should adopt “appropriate” – read “prohibitive” – sanctions for non-compliance.

Once this Directive has been adopted by the EU, the Member States are likely to have 21 months to implement it and another six months to determine critical infrastructure services operators.

 

General Data Protection Regulation (GDPR)

To protect personal data and increase the confidence of people using digital services, the GDPR (*5) would reinforce various aspects of the current European data protection directive 95/46 / EC, in particular:

  • Mandatory requirements for companies to identify risks, impacts, and define appropriate security measures, enabling data portability and the “right to be forgotten”
  • Early Access to data protection (“Data Protection by Design and by default ‘)
  • Better means of redress
  • Strengthening data protection authorities
  • Fines of up to EUR 1 million or 2% of turnover

 

Situation and Impact for Switzerland

The Swiss parliament has also revised the current Data Protection Act. Although the exact text of the law is not yet available, it is known that the general thrust and concepts that are already available for GDPR will be adopted into the Swiss Data Protection Act in similar form (“Swiss Finish”).

Switzerland has a national strategy to protect against cyber risks (NCS) which defines the legal basis for action in Measure 16. According to the NCS 2014 annual report, however there is no urgent need for legislation in addition to the currently ongoing ordinary legislative procedure. However, it is likely that Switzerland will need to adopt parts of the European Cyber Security policy to continue to participate in the “Digital Single Market” of the EU.

For Swiss companies that offer critical infrastructure services in the EU or to EU citizens, it will be compulsory to comply with the EU Cyber Security Directive (NIS) and GDPR.

 

Conclusion

Swiss firms working in the EU and with EU citizens will need to adjust to upcoming legislation and their mandatory requirements. In order to strengthen your consumers’ confidence, we recommend an early adopter approach to cyber security and data protection from your firm.

 

 

Save the date

We would be pleased to inform you more in our Webinar on Tuesday 26 January 4pm, in which we update you to the latest Data Protection & Cyber security regulatory developments. An invitation will be included in the January newsletter.

For further Information please contact:

Marco Schurtenberger, Cyber Security & IT Compliance Specialist marco.schurtenberger@ch.pwc.com, +41 58 792 22 33

The changing role of the CFO: How energy transformation is shifting the CFO focus

Our new Thought Leadership report

The new report, which forms part of a series of PwC publications on energy transformation, looks at how the power sector CFO role is evolving, the challenges it needs to address and the capabilities that will be crucial for delivering first-class performance.

It looks at eight specific challenges arising out of energy transformation:

1. Anticipating and leveraging the impact of new technologies
2. Reassessing and restructuring the asset portfolio to optimise value
3. Designing new ventures and commercial arrangements
4. Achieving full recovery of prior investments
5. Influencing policymakers and regulators
6. Replacing declining revenues from traditional businesses
7. Measuring enterprise performance as business models shift
8. Attracting capital through appropriate risk allocation

Which are your challenges and how does this effects your company? Please get in touch with me for any further discussion.

Download the full report here.

General Data Protection Regulation GDPR

The European Union (“EU”) has now adopted the General Data Protection Regulation (“GDPR”). A “strong compromise” was reached over how to ensure a high level of data protection across the EU. It was agreed by the EU Parliament and Council on December 15, 2015

The GDPR will impose a radical, much tougher data protection regulatory framework across the EU over the processing of personal data. Every EU-based “controller” or “processor” of personal data will be regulated, as will be every controller based outside the EU that targets or sells goods or services to, or stores and uses personal data of people living in the EU. This means that also companies based in Switzerland will have to comply with the provisions of the GDPR when processing the personal data of people living in the EU.

The big innovations in the GDPR

The adoption of the GDPR will present many entities everywhere with numerous new challenges. Key issues to be aware of include:

Compliance
Strict new compliance requirements will be imposed. For example, entities will have to perform “Privacy Impact Assessments”, conduct privacy audits and also have to implement “Privacy by Design” methodologies into their business processes.

Usage controls
Personal data will be subject to strict new usage controls (including “data minimisation”, “data portability” and the “right to be forgotten” principles).

Consent
Obtaining consent to use personal data will be much harder to achieve and to prove.

Bundling
The provision of a service that is conditional upon the individual giving permission for their data to be used for non-essential purposes (such as marketing) will be prohibited.

Aggregation
The ability to aggregate data to enable an individual to be profiled will be severely reduced.

Supervision
Regulators will also be empowered to carry out audits and inspections of entities on demand.

Breach disclosure
Entities will be required to report serious contraventions of the law to the regulators and to people affected.

Fines
Depending upon the final version of the regulation, serious violations of these new requirements will be punishable by fines of up to either 2% or 5% of group annual worldwide turnover.

Litigation
Citizens and pressure groups will be given the right to engage in group litigation (“class actions”) to recover compensation, even for any distress caused by breaches of the law.

Therefore, the EU GDPR raises countless compliance issues. It would be very easy to “get lost” in so much detail. Work will need to be done to understand the impact on each organisation, and to prioritise the compliance effort.

How PwC can help you

As a multi-disciplinary practice, we are uniquely placed to help you adjust to the new regulatory environment. Our global data protection team includes lawyers, consultants, auditors, technical risk specialists, forensics experts and strategists.

Save the date

We are holding a Webinar on Tuesday 26 January 2016 4pm, during which we will update you with our latest thinking on the GDPR, and talk about the impact of the new requirements for data protection and what this means for Swiss business. We are looking forward to discussing this topic with you. An invitation will be included in the January Newsletter.

Please click here to register for the Webinar.

For more information on the subject of data protection, please refer to the article Safe Harbor: stormy seas in Europe – impending storm in Switzerland?

Swiss pension plans are changing – your views

Swiss “1e” pension plans allow individuals to choose their own savings investments from a pool of pre-defined investment choices for contributions paid on earnings above CHF 126’900 a year. These plans face change in 2016. These changes are likely to make these plans more attractive to employers and result in changes to current employer pension funds. You can find more details in the overview below.

If you represent an employer or pension fund, whether that is in fund management, HR or finance, we’d like to hear your views on these plans. This will help you and our other corporate and pension fund clients and contacts make decisions about them. The short survey is currently available in English and German and should take around 5 minutes to complete.

English: 1e pension plan survey

Deutsch: Umfrage über 1e Vorsorgepläne

Please note:

  • The survey will only ask questions based on your knowledge today.
  • Some pages are skipped depending on the answers you give.
  • The survey is anonymous, but by including your email address at the end we can ensure you get the results as soon as they are available.

An overview of the changes

1ePension_ENG

 

New rules for the Swiss financial centre in the form of FinSA and FinIA – an update

The Swiss financial centre is facing a fundamental restructuring of its regulation. No less than three new pieces of legislation (the Financial Market Infrastructure Act, FMIA, the Financial Services Act, FinSA, and the Financial Institutions Act, FinIA) are set to replace large parts of the previous regulatory regime. The FMIA has already been passed by the Swiss parliament and will enter into force on 1 January 2016 together with the relevant implementing ordinances.

The Federal Council also opened the consultation on FinSa and FinIA on 27 June 2014. The consultation closed on 17 October 2014. At the time we informed you in a brochure about the impact of these two regulatory texts. The Federal Council has now drafted the FinSA and FinIA bills, which were published on 4 November 2015. It will be very interesting to see how the parliamentary debate unfolds. Following the publication of the FinSA and FinIA bills we enclose an updated version of our brochure.

Read more: New rules for the Swiss financial centre in the Financial Services Act and the Financial Institutions Act – November 2015 update

Financial Institutions Act (FinIA)

One of the main new features of the FinIA bill is a proposed ‘authorisation hierarchy’ and the inclusion of independent asset managers and trustees within this hierarchy. Authorisation on a particular level of the hierarchy will encompass authorisation for all activities at lower levels. This means that unlike today, a bank will no longer need to obtain additional authorisation as a securities dealer (or as it is now termed, an investment firm) if it engages in securities dealing.

By consolidating the regulations into a single law, materially unjustifiable differences that existed between the different forms of authorisation will be eliminated. The introduction of an explicit ‘clean money’ strategy subject to regulatory enforcement was proposed in the original FinIA consultation draft but has been dropped again in the Federal Council bill.

Independent asset managers and trustees are to be subject to an authorisation requirement for the first time. As this will involve additional costs for independent asset managers (who often have just one or a small number of employees), this change will probably have an impact on the market (closures, mergers).

Financial Services Act (FinSA)

In the past, regulation has largely been confined to institutions and players based in Switzerland. The activities of market players without an actual presence in Switzerland (in the form of a representative office, branch or subsidiary) were unaffected. This is set to change in part through the introduction of a registration requirement for client advisors at these market players. The new registration requirement will at least partly offset the competitive disadvantage of Swiss financial institutions in their international business, and gives the supervisory authorities an overview of the financial services being offered cross-border in Switzerland, which were previously completely uncontrolled.

The treatment of trailer fees that has been repeatedly confirmed by the Federal Supreme Court in recent years is enshrined in law in the FinSA bill. This also applies to execution-only activities.

Other changes:

  • Increased disclosure, documentation and explanatory obligations for all financial services providers
  • New training requirements for client advisors
  • Product-specific documentation requirements (prospectus, basic information sheet)

As one of the objectives of FinSA is an improvement in customer protection, the draft bill also contains a number of changes relating to the assertion of customer claims against financial institutions. Based on a comprehensive right to documentation and access to an ombudsman, more favourable cost arrangements for clients in civil proceedings are to be introduced.

If you have any further questions please contact:

Guenther Dobrauz, Partner
Leader Legal FS Regulatory & Compliance Services
Office: +41 58 792 14 97
Email: guenther.dobrauz@ch.pwc.com
PricewaterhouseCoopers AG Birchstrasse 160 | Postfach | CH-8050 Zurich

Simon Schären, Manager
Legal FS Regulatory & Compliance Services
Office: +41 58 792 14 63
Email: simon.schaeren@ch.pwc.com
PricewaterhouseCoopers AG Birchstrasse 160 | Postfach | CH-8050 Zurich

EUDTG Newsletter September – October 2015

EU direct tax law is a fast developing area. This presents taxpayers, in particular groups and multinational corporations that have an EU or European Economic Area (EEA) presence, with various opportunities.

 

The following topics are covered in this issue of EU Tax News:

 

CJEU Cases

  • Austria: CJEU Judgment on Austrian goodwill amortization: Finanzamt Linz
  • Netherlands: CJEU Judgment on discriminatory treatment of foreign shareholders receiving dividends from Dutch sources: Miljoen, X and Société Générale

National Developments

  • Finland: Proposed changes to domestic dividend taxation based on amendment to the EU Parent-Subsidiary Directive
  • Italy: New provisions on value attribution to assets of companies transferring place of residence to Italy
  • Italy: New provisions on horizontal tax consolidation
  • Italy: New branch exemption provisions
  • Spain: National High Court of Justice judgment on tax discrimination of UK UCITS
  • Spain: High Court of Justice of Madrid judgment on US investment funds
  • United Kingdom: First Tier Tribunal judgment about tax treatment of the statutory interest on repaid VAT
  • United Kingdom: 45% corporation tax on restitution interest

EU Developments

  • EU: EU-28 political agreement on automatic exchange of information of advance cross-border tax rulings and APAs
  • EU: European Commission launches public consultation on new proposal for CCCTB

Fiscal State aid

  • EU: European Commission final decisions on Starbucks Manufacturing BV and Fiat Finance and Trade
  • Spain: Amendment to General Tax Act regarding the State aid recovery procedure
  • Spain: Two High Court judgments on State aid regarding exemption from Spanish immovable property tax

 

Read the full newsletter here.

 

This EU Tax Newsletter is prepared by members of PwC’s international EU Direct Tax Group (EUDTG).

Further information about our service offerings in EU taxes: www.pwc.com/eudtg

 

World of FTAs – Part 3

On 4 August 2015 the successful finalization of the Free Trade Agreement (FTA) negotiations between the EU and Vietnam have been announced (as mentioned in the blog). The intention is that the FTA will be signed beginning of December 2015.

However, many things happened since August.

As announced too, the negotiations of the Trans-Pacific Partnership (TPP) have been successfully finalised. The future will show what impact the TPP will have on the negotiations between the EU and the U.S. on the TTIP (Transatlantic Trade and Investment Partnership). It is obvious that the political landscape and the pressure has much increased for both parties, internally (will TPP standards find its ways into the TTIP?) as well as externally (protests in Berlin of over 150,000 citizens).

Nonetheless, the EU continued to be focused and active:

The European Commission announced on the 15 November 2015 that the relationship with Australia will be deepened and that it is planned to start FTA negotiations in a very near future.

On the 16 November 2015 the European Council announced its approval to start FTA negotiations with the Philippines. This will be the third ASEAN country with whom the EU will negotiate a FTA (still to be ratified: Singapore and Vietnam). Others will come, since the EU has started FTA negotiations with Malaysia in 2010 (seven rounds of negotiations have been held) and with Thailand in 2013.

The last one to be mentioned is the EU – Japan FTA. The negotiations started in 2013 and the EU has pushed Japan to finalize those negotiations towards the end of 2015. However, in the last months Japans trade negotiators were kept busy with the TPP negotiations. Returning to the EU negotiations with new confidence, Japan pushes now for similar standards such as the ones mentioned in the TPP and the TTIP, to which the EU may not easily agree with. To cut a long story short, it has just been announced that the negotiations will not be finalised in 2015.

It will be interesting to see the future developments. The EU keeps its trade agenda busy and continues its efforts to enhance trade for companies. Not only on the FTA side, but also with the upcoming Unions Customs Code, which will enter into force on 1 May 2016. We will keep you posted.

To the above mentioned topics:

EU-Vietnam FTA

UCC 1 (only in German)

UCC 2 (only in German)

Process Intelligence: better control, better performance, better processes

Be it for procurement, for sales or for insurance claim approvals, processes drive the main cycles in your company. There is, however, often a gap between how processes are intended to be and what they are in reality. Identifying and understanding these gaps is imperative to boosting your operational effectiveness and efficiency, ensuring quality and compliance, standardising workflows, as well as detecting anomalies or fraud.

PwC’s Process Intelligence analyses the data from your IT systems and makes them fully transparent for you. Curious to understand the main propositions and added value of Process Intelligence?

Check out our video, the related blog post and the technical demos in English and French.

Video

Demo

More information here

Flash News: Potential delays for some parts of MiFID II/MiFIR

ESMA announced on 10 November 2015 that it pleaded with the Commission to delay certain parts of MiFID II/MiFIR. The entire MIFID II/MiFIR framework was supposed to be applicable as of  January 2017. However, all the final Level 2 texts are still not ready. The Commission hasn’t yet endorsed the Final technical advice and the Final drafts of Regulatory and Implementing Technical Standards RTS/ITS), submitted by ESMA in 2014 and 2015  espectively. ESMA has yet to prepare many others RTS/ITS in 2016.

Delays to some parts of MiFID II/MiFIR?

Steve Maijoor, the ESMA Chair delivered a statement to the Economic and Monetary Affair Committee (ECON) at the European Parliament on 10 November 2015. He provided the Eurodeputies with an update on the ESMA work on MiFID II/MiFIR II and the consequences on the implementation timeline.

The ESMA Chair insisted on the fact that the delay to build the necessary – MiFID II/MiFIR compliant- IT systems is hardly compatible, and in some aspects even incompatible, with the initial regulatory timeline. Moreover, there are still some uncertainties related to what will be in some of the final texts:

“The timing for stakeholders and regulators alike to implement the rules and build the necessary IT systems is extremely tight. Even more, there are a few areas where the calendar is already unfeasible. This relates to the fact that it will take some time, and well into 2016, before the text of  the RTS will be stable and final. […] We have therefore raised these timing issues with the European Commission, and the fact that some IT systems will not be ready in January 2017, and the uncertainty this will create as they are needed for the execution of certain elements of MIFID II. Related to that, we have raised with the Commission whether this uncertainty would need a legislative response with delaying certain parts of MIFID II, mainly related to transparency, transaction and position reporting.” (Steve Maijoor, Speech to ECON, 10 November 2015)

ESMA has thus suggested to the European Commission to postpone the implementation timeline for some aspects of the MiFID II/MiFIR:

1.      Transparency
2.      Transaction reporting
3.      Position reporting

With respect to transaction reporting, ESMA highlights that both ESMA/Supervisors and the investment firms/trading venues need to build complex IT systems “(almost) from scratch” to allow the former to determine aggregate positions in commodity  derivatives at group level, and the latter to reshape their transaction and reference data  reporting systems.

When it comes to transparency and position reporting, ESMA explains that the assessment of the pre-transparency waivers and of the proposals for setting position limits will be “extremely resource-intensive” if the initial deadline is kept, “given the sheer volume of financial instruments covered”.

The EU institutions will have to decide whether to postpone these aspects of the MiFID II/MIFIR framework.  

Based on the latest ECON discussions, held on 11 November 2015, the European Commission appears to agree with ESMA “that a delay is needed” and that “the simplest and most legally sound approach would be a one-year delay”. The European Parliament, however, appears to strongly oppose the delay. Its rapporteur, Markus Feber, mentions that “postponement of implementation of the cornerstone legislation of financial markets in the EU is not in line with G20 commitments”.

How PwC can help

PwC can support you in assessing the impacts of MiFID II/MiFIR and identifying the gaps. Our qualified professionals can also directly support or re-enforce your teams in the implementation of these requirements.

PwC will keep you informed of any updates regarding the MiFID II/MiFIR timeline.
If you have any further questions do not hesitate to contact us.