Switzerland Tries to Get a Handle on Financial Regulation Compliance

A Complex Web of Legislation

The Swiss financial market is governed by a complex set of laws and regulations aimed at combating money laundering. However, critics argue that loopholes remain in the system.

Key Pieces of Legislation

There are three key pieces of legislation that form the backbone of Switzerland’s regulatory framework:

• Federal Act: Sets the tone for the sector and applies to financial intermediaries.
• Federal Council Ordinance: Introduces specific requirements for financial intermediaries, including duties to report suspicious activity and conduct thorough background checks on clients.
• FINMA Ordinance: Outlines specific measures financial institutions must take to prevent money laundering and terrorist financing.

Loopholes Remain in the System

Critics argue that despite these laws and regulations, loopholes still exist. The Anti-Money Laundering Act does not go far enough, and even with the added layer of regulation from the Anti-Money Laundering Ordinance, weaknesses remain.

FINMA’s Efforts to Close Gaps

FINMA, Switzerland’s primary regulator, has introduced its own ordinance aimed at closing these gaps. The FINMA Anti-Money Laundering Ordinance outlines specific measures financial institutions must take to prevent money laundering and terrorist financing.

Conclusion

While progress has been made in addressing compliance issues, critics argue that there is still much work to be done. The country’s financial sector remains vulnerable to abuse until these loopholes are fully addressed.