Financial Regulatory Bodies in Switzerland: Crucial Role in Monitoring Market Compliance
Switzerland’s financial regulatory bodies play a vital role in ensuring compliance with financial market legislation, and the Swiss Financial Market Supervisory Authority (FINMA) is no exception. As a supervisory body, FINMA has regulatory powers to ensure that financial institutions operate within the bounds of the law.
Regulatory Powers and Limitations
According to the Financial Market Supervision Act and implementing provisions, FINMA’s guiding principles for its regulatory activity are defined. Under Article 7 of the act, FINMA may regulate through ordinances and circulars. Ordinances spell out technical details, while circulars describe how FINMA interprets financial market law.
- Ordinances provide legal certainty for supervised entities
- Circulars do not introduce new rights or obligations
FINMA’s regulatory powers are limited by overarching legislation, which defines the limits of its competence in a given case. The authority takes into account various factors when enacting regulations, including: + Costs + Competition + Innovation capability + International competitiveness of Switzerland’s financial centre
Regulatory Process and Transparency
The regulatory process is transparent and involves the participation of affected and interested parties through: + Preliminary consultations + Public hearings
FINMA consults with federal administrative bodies concerned before issuing or amending ordinances and circulars, and after approval by its Board of Directors.
- FINMA provides information about ongoing and completed hearings on its regulations
- Comments received during the hearing and results are reported in a report
The authority’s communication policy is restrained, and it carries out rigorous checks to ensure that its supervisory communication does not contain regulatory elements.
Implementation and Transparency
FINMA’s regulations are triggered by amendments to overarching legislation, which provides information about regulatory projects at the federal level. The implementation of regulations is planned in a timely manner, with appropriate transitional periods where necessary.
- FINMA has published all current ordinances and circulars on its website
- Previous versions are archived for reference
The authority’s commitment to transparency and stakeholder participation is crucial in ensuring a stable and secure financial market in Switzerland.