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Financial Regulation Compliance in Switzerland: A Must-Know for Financial Intermediaries
In assessing applications, regulatory bodies place great emphasis on compliance with financial regulations. In addition to navigating complex national legislation and regulations, Swiss financial institutions must also adhere to international treaties related to anti-money laundering (AML) and terrorism prevention.
Anti-Money Laundering Act (GwG)
The Geldwaschreigesetz (Anti-Money-Laundering Act), or GwG, governs the combating of money laundering and terrorist financing among financial intermediaries. This act ensures due diligence in financial transactions by mandating financial institutions to:
- Verify customer identities
- Monitor suspicious transactions
- Report any irregularities
Swiss Financial Market Supervisory Authority (FINMA)
The Swiss Financial Market Supervisory Authority (FINMA) sets norms for controlling client transactions, on-boarding procedures, audit frequencies for financial intermediaries and clients, and notification processes for suspected transactions. These regulations aim to prevent financial institutions from being used for illegal activities.
Meldestelle für Geldwäscherei (MROS)
The Meldestelle für Geldwäscherei (MROS) is responsible for reporting suspicious activities related to money laundering and terrorist financing. This authority receives information about clients, financial intermediaries, and acts to stop such transactions by:
- Blocking funds
- Forwarding information to international AML bodies
Compliance Requirements
To comply with these requirements and fulfill legal obligations, financial institutions must have an independent employee tasked with controlling AML procedures and their effectiveness within the company. This can include:
- Client on-boarding
- Risk management
- Compliance rules
In smaller firms, a single person may handle these tasks.
The Anti-Money-Laundering (AML) Officer
The Anti-Money-Laundering (AML) officer can be either a company employee or a separate entity providing external AML services under contract. This individual is responsible for:
- Monitoring and controlling AML procedures
- Reporting any irregularities to the authorities
Documents Required for Financial License Application
The list of documents and information required for the AML officer during financial license application is similar to that for the company director, including:
- Proof of identity
- Proof of address
- Business registration certificate
- Company articles and by-laws
- Memorandum and articles of association
- List of shareholders and directors
By understanding these compliance requirements, financial intermediaries can ensure a smooth and successful application process in Switzerland.