Switzerland’s Financial Markets Regulator: Ensuring a Stable and Efficient Financial Industry

Introduction

The Swiss parliament has granted FINMA, the country’s independent financial-markets regulator, a significant degree of autonomy to oversee the nation’s financial industry. Since its inception on January 1, 2009, FINMA has been responsible for supervising banks, insurance companies, financial institutions, collective investment schemes, and their asset managers and fund management companies.

Institutional Independence

FINMA operates as a public law institution with a governing board of directors and an executive board, ensuring its institutional independence. This autonomy enables the regulator to exercise effective supervision over Switzerland’s financial industry. Strong corporate governance is a crucial prerequisite for a credible and independent supervisory authority.

Key Features:

• Autonomous decision-making
• Independent from political authorities
• Subject to parliamentary scrutiny

Functional Independence

FINMA operates independently of Switzerland’s political authorities, receiving no directives on how to carry out its regulatory duties from the parliament or government. While it remains part of the country’s political structures, FINMA is subject to parliamentary scrutiny and must account to the parliamentary commissions overseeing its work.

Key Features:

• No direct influence from politics
• Accountability to parliamentary commissions

Financial Independence

FINMA is financed through levies and fees charged for its supervisory work, rather than taxpayer funds. The institutions it regulates are required to pay an annual levy to cover costs not met by fees. FINMA’s accounts are audited by the Swiss Federal Audit Office.

Key Features:

• Financed through levies and fees
• No reliance on taxpayer funds

Protecting Financial Market Clients

As mandated by the parliament, FINMA is responsible for protecting creditors, investors, and policyholders, ensuring that Switzerland’s financial markets function effectively. Its supervisory tasks – authorization, supervision, and enforcement of supervisory law – stem from this mandate.

Key Features:

• Protection of creditors, investors, and policyholders
• Effective functioning of financial markets

Strategy and Organization

Based on legally defined tasks and objectives, FINMA’s Board of Directors draws up strategic goals submitted for approval by the Federal Council every four years. To achieve its goals, FINMA has an appropriate organizational structure with a clear distinction between strategic management through the Board of Directors and operational management through the Executive Board.

Key Features:

• Strategic goals defined by the Board of Directors
• Clear organizational structure

Deployment of Third Parties

FINMA delegates part of its supervisory work to audit firms and appoints agents on a case-by-case basis to meet its objectives.

Key Features:

• Delegation to audit firms
• Appointment of agents as needed

National Cooperation and International Activities

FINMA fosters national cooperation and represents Switzerland and its principle-based regulatory approach in competent specialist committees. It also responds to requests for assistance from foreign supervisory authorities, promoting international cooperation and a stable global financial industry.

Key Features:

• National cooperation
• Representation of Switzerland’s regulatory approach internationally