Financial Crime World

Financial Regulation Compliance in Switzerland: FINMA’s Regulatory Powers

The Swiss Financial Market Supervisory Authority (FINMA) plays a crucial role in monitoring compliance with financial market legislation, but it also possesses regulatory powers guided by specific principles.

FINMA Ordinances and Circulars

According to Article 7 of the Financial Market Supervision Act, FINMA is authorized to issue ordinances and circulars. These documents provide guidance on technical details and how FINMA interprets financial market law. They do not introduce new rights or obligations not already established by overarching legislation.

  • The current FINMA ordinances can be accessed through the Classified Compilation of Federal Legislation (SR), with previous versions archived online.
  • The authority’s current and archived circulars are also available for public review.

Principles of Regulation

FINMA regulates only when necessary to achieve its supervisory goals, taking into account risks and designing regulations in a competition- and technology-neutral manner. The authority considers the potential effects on: + Sustainability and international competitiveness of Switzerland’s financial center + Costs incurred by supervised institutions + Impact on competition and innovation + International minimum standards

Regulatory Process

FINMA prioritizes transparency and stakeholder participation throughout its regulatory process:

  • Preliminary consultations with affected parties occur at an early stage.
  • Consultation with federal administrative bodies before issuing or amending ordinances or circulars.
  • After approval from the Board of Directors, FINMA presents these documents during public hearings, accompanied by reports detailing comments received and hearing results.

Planning and Implementation

FINMA informs the public about planned and pending regulatory projects and their status. Regulations are typically triggered by amendments to overarching legislation, which are dependent on timing and implementation. The Federal Department of Finance (FDF) or State Secretariat for International Finance (SIF) provides information about federal-level regulatory projects.

By adhering to these principles and processes, FINMA ensures effective financial regulation compliance in Switzerland while minimizing administrative burdens and promoting a stable and competitive financial environment.