Swiss regulations updated

December 29, 2022

FINMA has a serious leverage on market participants, since its activities include the audit of Swiss banks and the imposition of sanctions against violators of financial legislation .

Service activities

The main activity of FINMA is the protection of the rights of investors, policyholders and creditors, as well as guaranteeing equal rights for all financial market participants. In addition, the service strives to maintain the impeccable reputation and stable operation of the Swiss financial sector, indirectly contributing to the development of healthy competition between brokerage houses.

Structures, insurance companies, mutual and investment funds, as well as brokerage houses. Prior to the formation of FINMA, state control was carried out by separate structures: FOPI (regulation of private insurance) and SFBC (bank control). In 2007, as a result of a merger the organization was founded.

The organization receives funding from controlled companies and is considered fully independent. It confirms the independence of the organization and its structure – about 350 people work in the service, among which there are lawyers, economists, mathematicians, as well as specialists in audit, investment and accounting. FINMA is an authorized and autonomous legal entity that is completely independent of the finance department. The activity of the service is regulated by the regulations of the Swiss Parliament.

Powers of the Swiss regulator

The Swiss Parliament has given FINMA full power over the country’s financial and insurance institutions. The regulator has the right to require companies to provide the necessary documentation, take part in resolving conflict situations, carry out the procedure for liquidating a business or its recovery. Within its powers, the supervisory service licenses, monitors and, in case of violations, fines Swiss brokerage companies. In addition, FINMA develops a legislative framework in the field of finance, as well as provides recommendations and consulting services as part of the improvement of existing legal acts.

The regulator acts as a full-fledged legislative body, therefore it has the right to issue circulars and technical rules for its participants, as well as develop and approve financial performance standards. FINMA representatives have the opportunity to take part in various legal proceedings against companies that are accused of insolvency. In addition, the regulator has the right to impose sanctions against violators or, on the contrary, provide administrative support to members of the organization.

Functions of the Financial Market Supervisory Service

The main activity of the regulator is the implementation of dual control of financial organizations by audit firms and FINMA divisions. Based on the results of the audit, the regulator ranks companies, allocating them places in one of the supervisory categories. In addition, the organization performs the following functions:

  • research and assessment of capital adequacy
  • building a solid foundation for transparent investment activity
  • combating criminal schemes
  • audit monitoring
  • verification of compliance by market participants with financial legislation

History of Swiss financial regulation

FINMA was founded on 22 June 2007 with the passage of the Federal Law on the FINMASA. This merged the Federal Office for Private Insurance (FOPI), the Swiss Federal Banking Commission (abbreviated in German: EBK) and the AML Office into one agency responsible for all financial adjustments in Switzerland.

Market financial updates

The above-mentioned office published a statement on the continuation of protective measures against Sberbank (Switzerland) AG, as well as on the change of the owner of Sberbank (Switzerland) AG.

Highlights of the update:

  • FINMA has announced that it has temporarily lifted the safeguard measures at Sberbank (Switzerland) AG from September 2, 2022 until September 5, 2022, in order to facilitate the sale of Sberbank (Switzerland) AG. Russian parent Sberbank (Switzerland) AG is selling its stake in Geneva-based m3 Groupe Holding SA. The restructured bank will continue to operate under the current FINMA license under the new name TradeXBank AG. FINMA is closely monitoring the deal and temporarily lifted safeguards introduced in March 2022 to protect the bank’s creditors.
  • At its meeting on 31 August 2022, the Federal Council adopted the revised AMLA and Anti-Money Laundering Ordinance (AMLO) as amended from 1 January 2023. part of the revised AIDS will enter into force from January 01, 2022, and the main part will enter into force from January 01, 2023. on the purchase of scrap precious metals and on the new mandate of the Central Bureau of Precious Metals Control as a money laundering watchdog. Responsibility for suspected money laundering will no longer be prescribed in the adjustments of supervisory bodies; they will be regulated by the Federal Council.
  • By issuing Green Confederation bonds, the Federal Council intends to promote the application of international standards in the Swiss capital market and to encourage private sector participants to issue their own green bonds. The framework approved by the Federal Council forms the basis of the Confederation’s future green bond issuance. It shows how the bonds will be integrated into the federal government’s sustainability strategy, what green spending from the federal budget can be allocated to the Confederation’s green bond, and how that spending will be reported. The exact characteristics of the first issue (amount, maturity, coupon) will depend on the Confederation’s funding requirements and prevailing market conditions at the time of issue.

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