he Swiss Financial Market Supervisory Authority FINMA is an institution under public law with its own legal personality. It is responsible for implementing the Financial Market Supervision Act and financial market legislation. As an independent supervisory authority, FINMA acts to protect the interests of creditors, investors and insured persons and to ensure the proper functioning of the financial markets (Art. 5 FINMASA). Providing protection for individuals and safeguarding the functions of the financial markets are therefore at the heart of FINMA's mandate.
Protection for individuals includes protection against insolvencies among financial institutions, unfair business practices and unequal treatment in securities markets. Safeguarding the functions of the financial markets means maintaining the stability of the financial system and promoting confidence in the orderly functioning of the financial markets. FINMA's mandate therefore goes beyond ensuring the financial soundness of any individual institution. Effective protection of clients and market functionality also indirectly enhances the reputation and prestige of the market place. Through professional and credible supervision, FINMA contributes to preserving and enhancing the competitiveness of a strong financial centre.
FINMA has statutory authority over banks, insurance companies, stock exchanges, securities dealers, collective investment schemes, distributors and insurance intermediaries. It authorises the operation of companies in the supervised sectors. It ensures that supervised institutions comply with the relevant laws, ordinances, instructions and regulations and continue to meet their licensing requirements. FINMA is responsible for combating money laundering. It also provides administrative assistance, imposes sanctions and, where necessary, conducts restructuring and bankruptcy proceedings.
FINMA is the supervisory authority for the disclosure of shareholdings. It initiates the required proceedings, issues decisions, and files charges with the Federal Department of Finance (FDF) in suspicious cases. FINMA also supervises public takeover offers and acts in particular as the body to which appeals against rulings of the Swiss Takeover Board (TOB) can be brought. Finally, FINMA has a role in the legislative process and, where competent, issues its own ordinances. It issues circulars to clarify the interpretation and application of financial market legislation and is also responsible for recognising self-regulating frameworks.
FINMA's strategic goals
FINMA's responsibilities are set out in Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA) and the seven financial market acts. The legal framework gives FINMA a degree of independence in the way that it operates. FINMA's strategic goals explain how it uses this freedom and specify the key areas that it focuses on in fulfilling its mandate. FINMA's board of directors defines the strategic goals and submits them to the Federal Council for approval.
Corporate Governance and Code of Conduct
FINMA has functional, institutional and financial independence. Its management structure is modern: it has a board of directors, an executive board and an external auditor under the remit of the Federal Audit Office (FAO). As a counterbalance to FINMA's independence, it has been made accountable to and is subject to the overall political supervision of the Confederation. Furthermore, FINMA's decisions can be challenged before a court of law.
It is of vital importance to FINMA that the people who work on its behalf conduct themselves with integrity and refrain from any activity that could jeopardise its good name. The code of conduct published by FINMA (in German or French) sets out strict guidelines, particularly with regard to conflicts of interest that may arise in connection with activities carried out on FINMA's behalf. Everyone who acts for FINMA, namely the Board of Directors and all staff members, whether employed on a permanent or temporary basis, must comply with this code of conduct.
Seven laws in one: the FINMASA umbrella
The Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA) was approved by parliament on 22 June 2007 and came into full force on 1 January 2009.
In addition to organisational issues regarding FINMA as an institution, FINMASA also sets out principles governing financial market regulation, liability rules and harmonised supervisory instruments and sanctions. FINMASA therefore functions as an umbrella law for the other seven laws governing financial market supervision. It is applicable in cases where the other financial market laws do not provide any particular regulations. It takes into account, however, the specificities of the different areas of supervision.
The seven financial market acts are:
- Banking Act