Swiss Financial Market Supervisory Authority

Last updated

Swiss Financial Market Supervisory Authority
(in German) Eidgenössische Finanzmarktaufsicht
(in French) Autorité fédérale de surveillance des marchés financiers
(in Italian) Autorità federale di vigilanza sui mercati finanziari
(in Romansh) Autoritad federala per la surveglianza dals martgads da finanzas
Finma-ch-logo.png
Agency overview
Formed2007
Superseding agency
  • Swiss Federal Banking Commission (EBK-CFB)
Jurisdiction Switzerland
Headquarters Bern, Switzerland
Employees583 (2023) [1]
Minister responsible
Agency executives
Parent agency Federal Department of Finance
Website www.finma.ch

The Swiss Financial Market Supervisory Authority (FINMA; German : eidgenössische Finanzmarktaufsicht, French : Autorité fédérale de surveillance des marchés financiers, Italian : Autorità federale di vigilanza sui mercati finanziari) is the Swiss government body responsible for financial regulation. This includes the supervision of banks, insurance companies, stock exchanges and securities dealers, as well as other financial intermediaries in Switzerland. [2] FINMA's name and acronym are usually expressed in English so as to avoid the semblance of favouring any one of Switzerland's linguistic regions.[ citation needed ]

Contents

Entrance to the FINMA building. Finma Building Entrance Bern, 2024.jpg
Entrance to the FINMA building.

FINMA was established in 2007 and succeeded the Federal Banking Commission (German : eidgenössische Bankenkommission, French : Commission Fédérale des Banques, thus EBK-CFB) established in 1934. [3] It is an independent institution with its own legal personality based in Bern. [4] It is institutionally, functionally and financially independent from the central federal administration and the Federal Department of Finance and reports directly to the Swiss parliament. [3]

History

Federal Banking Commission

Banking supervision was introduced in Switzerland by the Federal Act on Banks and Savings Banks of 1934, following unsuccessful attempts that had started in 1914 and triggered by the severe banking crisis of 1931. The 1934 legislation established the Federal Banking Commission (EBK-CFB) as a national prudential supervisor. For decades, however, the EBK-CFB staff was kept in the single digits on a very small budget. It was still only 10 in 1975, and grew to 35 in the late 1980s. [5]

Creation of FINMA

FINMA was founded on the 22 June 2007 with the passing of the Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA). [3] This merged the EBK-CFB with the Federal Office of Private Insurance (FOPI) and the Anti Money Laundering Control Authority into one agency responsible for all financial regulation in Switzerland. [3]

Switzerland is home to UBS, one of the world's major banks, and given its significance to the Swiss economy, FINMA has a dedicated regulatory team overseeing its operations. [6]

All Swiss banks must receive a banking license from FINMA. [7] Since 2019, certain fintech companies can also apply for a "FinTech banking license". [8] As of May 2023, five companies have been granted fintech banking licenses: Klarpay AG, Relio AG, SR Saphirstein AG, SWISS4.0 SA, and Yapeal AG. [9]

UBS and US tax affair

On 19 February 2009, the US government filed suit against UBS to reveal the names of all 52,000 U.S. customers, alleging that the bank and these customers conspired to defraud the US tax authority IRS of legitimately owed tax revenue. [10] However revealing customer names was contrary to Swiss law and put UBS in a difficult position. Eventually UBS, with the support of FINMA, agreed to provide the names of 250 to 300 clients through FINMA and pay U.S. $780 million fines to settle the matter. [10] FINMA used sections 25 and 26 of the Banking Act, provided for situations in which a bank is threatened with bankruptcy, to allow this to happen. [11] Subsequently, in February 2009, the Federal Administrative Court of Switzerland ordered FINMA to stop the transmission to the U.S. tax authorities. [10]

Responsibilities and functions

As a state regulatory body, the FINMA is endowed with supreme authority over banks, insurance companies, stock exchanges, securities dealers and collective investment schemes. [12] It is responsible for combating money laundering and, if necessary, conducts financial restructuring and bankruptcy proceedings. [13] In addition, it has supervisory powers with respect to the disclosure of participations and is the complaints body for decisions of the Takeover Board in the area of public takeover bids for listed companies. [14]

The FINMA grants operating licences for companies and organisations subject to its supervision, monitors the supervised institutions with respect to their compliance with the requisite laws, ordinances, directives and regulations, as well as with the conditions for the granting of licences that must be complied with at all times. [15] If necessary and to the extent permissible by law, the FINMA imposes sanctions, provides administrative assistance and regulates. [16] FINMA is also responsible for ensuring that self-regulation is acknowledged appropriately. [17] The FINMA provides supervision when there is a risk to creditors, investors and policy holders and can penalise individuals or authority, its decision, however, can be challenged in a court. [12] It can also ensure compliance, issue warnings, cancel licenses and liquidate companies. [18]

Supervision

FINMA takes a risk-based approach to its supervision of financial institutions, working to identify threats that could affect individual institutions or the entire financial system. [19] FINMA is particularly vigilant about money laundering and the financing of terrorism and closely monitors the Swiss financial markets for AML/CFT compliance. [20]

Organisational structure

The FINMA is made up of a board of directors, an executive board and an extended executive board. [21]

The Board of Directors is a strategic management body and has seven to nine independent expert members appointed via parliament. It decides on matters of substantial importance, issues ordinances and circulars, and is responsible for FINMA’s budget. It also ensures internal controls by means of an internal audit unit and oversees the Executive Board. The Board of Directors appoints the CEO and elects the members of the Executive Board based on the CEO's proposals. [22]

The Executive Board is FINMA's operational management body and is responsible for ensuring that banks, insurance companies, stock exchanges, securities dealers and other financial intermediaries are supervised in accordance with the law and respective strategy. The Executive Board decides on matters such as the granting of licences, key management, organisational and personnel issues, directives and supervisory matters of cross-divisional significance. The Executive Board prepares the necessary files and materials for decisions on items of business that fall under the remit of the Board of Directors and is responsible for implementing the resolutions of the Board of Directors and its committees. [23]

Anne Héritier Lachat was Chairwoman of the Board of Directors from 2011 [24] [25] until 1 January 2016 [26] when Thomas Bauer, former Ernst & Young partner became Chairman. [27] Since 2021, Marlene Amstad  [ de ] serves as the chair. [28]

See also

Related Research Articles

<span class="mw-page-title-main">Banking in Switzerland</span>

Banking in Switzerland dates to the early 18th century through Switzerland's merchant trade and over the centuries has grown into a complex and regulated international industry. Banking is seen as emblematic of Switzerland and the country has been one of the largest offshore financial centers and tax havens in the world since the mid-20th century, with a long history of banking secrecy and client confidentiality reaching back to the early 1700s. Starting as a way to protect wealthy European banking interests, Swiss banking secrecy was codified in 1934 with the passage of a landmark federal law, the Federal Act on Banks and Savings Banks. These laws were used to protect assets of persons being persecuted by Nazi authorities but have also been used by people and institutions seeking to illegally evade taxes, hide assets, or to commit other financial crime.

<span class="mw-page-title-main">Basel Committee on Banking Supervision</span> International financial regulatory body

The Basel Committee on Banking Supervision (BCBS) is a committee of banking supervisory authorities that was established by the central bank governors of the Group of Ten (G10) countries in 1974. The committee expanded its membership in 2009 and then again in 2014. As of 2019, the BCBS has 45 members from 28 jurisdictions, consisting of central banks and authorities with responsibility of banking regulation.

Julius Bär Group AG, known alternatively as Julius Baer Group Ltd., is a private banking corporation founded and based in Switzerland. Headquartered in Zürich, it is among the older Swiss banking institutions. In terms of assets under management, Julius Baer is number two among Swiss banks after UBS and the biggest pure-play private bank. The bank's reputation has been marred by various controversies and legal challenges. These include a legal dispute with WikiLeaks in 2008, allegations of aiding U.S. citizens in tax evasion in 2011, and a censure by the Swiss Financial Market Supervisory Authority (FINMA) in 2020 for deficiencies in combating money laundering. The bank has also been implicated in money laundering scandals involving corrupt Venezuelan officials and has faced investigations for its role in the FIFA corruption case. These controversies have cast a shadow on its legacy and raised questions about its compliance and ethical practices.

<span class="mw-page-title-main">Swiss National Bank</span> Central Bank of Switzerland

The Swiss National Bank is the central bank of Switzerland, responsible for the nation's monetary policy and the sole issuer of Swiss franc banknotes. The primary goal of its mandate is to ensure price stability, while taking economic developments into consideration.

BX Swiss is a Swiss stock exchange operated by BX Swiss AG. It has its main office in Zurich and is subject to supervision by the Swiss Financial Market Supervisory Authority (FINMA).

<span class="mw-page-title-main">Huw Jenkins</span> English businessman

Huw Jenkins is vice chairman of the board of BTG Pactual, based in London. He is a managing partner of the firm as well as a member of the Global Management Committee. Jenkins is also chairman of Engelhart Commodities Trading Partners (ECTP), formerly known as BTG Pactual Commodities, which was spun out of BTG Pactual in 2016.

The Swiss Bankers Association is a professional organization of Swiss financial institutions.

<span class="mw-page-title-main">European Insurance and Occupational Pensions Authority</span>

The European Insurance and Occupational Pensions Authority (EIOPA) is a European Union financial regulatory agency. It was established in 2011 under Regulation (EU) No 1094/2010.

Raoul Weil is a Swiss banker. Weil is best known as being the former chairman and chief executive officer of Global Wealth Management & Business Banking at UBS AG. Weil eventually became a member of UBS's group executive board.

<span class="mw-page-title-main">Financial Market Authority (Liechtenstein)</span>

The Financial Market Authority is the primary financial regulatory agency of the Principality of Liechtenstein. It is an independent, integrated financial market supervisory authority operating under public law and covers all financial markets in Liechtenstein.

<span class="mw-page-title-main">PostFinance</span> Financial services subsidiary of Swiss Post

PostFinance Ltd is the financial services unit of Swiss Post which was founded in 1906. As of 2023, it is the fifth largest retail financial institution in Switzerland. Its main area of activity is in the national and international payments and a smaller but growing part in the areas of savings, pensions and real estate.

<span class="mw-page-title-main">European Banking Authority</span> Agency of the European Union

The European Banking Authority (EBA) is a regulatory agency of the European Union headquartered in La Défense, Île-de-France. Its activities include conducting stress tests on European banks to increase transparency in the European financial system and identifying weaknesses in banks' capital structures.

Foreign exchange regulation is a form of financial regulation specifically aimed at the Forex market that is decentralized and operates with no central exchange or clearing house. Due to its decentralized and global nature, the foreign exchange market has been more prone to foreign exchange fraud and has been less regulated than other financial markets.

VZ Group is a Swiss financial service provider based in Zug. It is known by the name VZ Vermögenszentrum on the market. Since March 2007, the holding company VZ Holding Ltd is listed on the SIX Swiss Exchange. The group employs around 1400 employees and managed client money amounting to CHF 45 billion as of 31 December 2023. VZ Vermögenszentrum has almost 40 locations in Switzerland, Germany, and England.

<span class="mw-page-title-main">Wolfsberg Group</span>

The Wolfsberg Group is an association of 12 global banks which aims to develop frameworks and guidance for the management of financial crime risks.

<span class="mw-page-title-main">Swissquote</span> Swiss banking group

Swissquote Group Holding SA is a Swiss banking group specialising in providing online financial and trading services. The Group's shares have been listed on the SIX Swiss Exchange under the ticker symbol “SQN” since 29 May 2000. Its headquarters are located in Gland, Switzerland. The company also has offices in Zurich, London, Dubai, Hong Kong, Malta, Cyprus, Bucharest, Singapore and Luxembourg, with more than 1,134 employees in 2023. Swissquote Bank Ltd holds a banking licence issued by its supervisory authority, the Swiss Financial Market Supervisory Authority (FINMA), and is a member of the Swiss Bankers Association (SBA). The Group's headquarters are located in Gland, Switzerland. The Group has 1040 employees as of December 2022.

<span class="mw-page-title-main">Swiss Gambling Supervisory Authority</span>

The Swiss Gambling Supervisory Authority is the licensing and supervisory authority for so-called large-scale Gambling activities, i.e. lotteries, sports betting and skill-based games run intercantonally, online or by automated means. It has its seat in Bern.

Giorgio Behr is a Swiss businessman, lawyer, accountant and university professor.

The general notion of cryptocurrencies in Europe denotes the processes of legislative regulation, distribution, circulation, and storage of cryptocurrencies in Europe. In April 2023, the EU Parliament passed the Markets in Crypto Act (MiCA) unified legal framework for crypto-assets within the European Union.

Mark Branson is a British-Swiss financial market expert and former bank manager. He has been President of the German Federal Financial Supervisory Authority since 1 August 2021 and was Director of the Swiss Financial Market Supervisory Authority (FINMA) from 2014 to 2021.

References

  1. ↑ "FINMA's annual media conference" . Retrieved 2 April 2024.
  2. ↑ "FINMA at a glance" (PDF). admin.ch. Retrieved 19 September 2024.
  3. 1 2 3 4 "Switzerland: Detailed assessment of implementation — IOSCO objectives and principles of securities regulation" (PDF). IMF . 20 August 2014. Retrieved 19 September 2024.
  4. ↑ Bundeskanzlei - P. "SR 956.1 Bundesgesetz vom 22. Juni 2007 über die Eidgenössische Finanzmarktaufsicht (Finanzmarktaufsichtsgesetz, FINMAG)".
  5. ↑ Eiji Hotori; Mikael Wendschlag; Thibaud Giddey (2022). Formalization of Banking Supervision. Palgrave Macmillan. pp. 87–98. doi:10.1007/978-981-16-6783-1. ISBN   978-981-16-6782-4. S2CID   245193352.
  6. ↑ "UK and Swiss regulators under scrutiny". Financial Times. 15 September 2011.
  7. ↑ "Authorisation requirements for banks". Eidgenössische Finanzmarktaufsicht FINMA. Retrieved 4 March 2022.
  8. ↑ "FinTech licence". Eidgenössische Finanzmarktaufsicht FINMA. Retrieved 4 March 2022.
  9. ↑ "List of persons licensed by FINMA pursuant to Article 1b BA (FinTech licence)" (PDF). Eidgenössische Finanzmarktaufsicht FINMA. Retrieved 15 May 2023.
  10. 1 2 3 "UBS Warns US Tax Fraud Battle Could Be Its Ruin". DW.COM.
  11. ↑ "The Swiss authorities under the pressure of the financial crisis and the disclosure of UBS customer data to the USA" (PDF). Federal Assembly . 31 May 2010. Retrieved 19 September 2024.
  12. 1 2 "Banking supervision". FINMA. Retrieved 19 September 2024.
  13. ↑ "Withdrawal of authorisation, liquidation and bankruptcy". FINMA. Retrieved 19 September 2024.
  14. ↑ "Market supervision". FINMA. Retrieved 19 September 2024.
  15. ↑ "Types of authorisation". FINMA. Retrieved 19 September 2024.
  16. ↑ "Measures against licence holders, their owners, ultimate management and staff". FINMA. Retrieved 19 September 2024.
  17. ↑ "Supervision of self-regulatory organisations". FINMA. Retrieved 19 September 2024.
  18. ↑ "Enforcing supervisory law". FINMA. Retrieved 19 September 2024.
  19. ↑ "Supervision - FINMA's core task". FINMA. Retrieved 19 September 2024.
  20. ↑ "Money laundering supervision (2022)". FINMA. Retrieved 19 September 2024.
  21. ↑ "How FINMA is organised". FINMA. Retrieved 19 September 2024.
  22. ↑ "FINMA's strategic leadership". Eidgenössische Finanzmarktaufsicht FINMA. Retrieved 19 September 2024.
  23. ↑ "Operational management". Eidgenössische Finanzmarktaufsicht FINMA. Retrieved 19 September 2024.
  24. ↑ "FINMA: Federal Council elects Anne Héritier Lachat as Chairwoman of the Board of Directors". Federal Department of Finance FDF.
  25. ↑ Ermes Gallarotti (23 December 2010). "Bundesrat wählt Anne Héritier Lachat zur neuen Verwaltungsratspräsidentin der Aufsichtsbehörde: Eine Professorin an der Spitze der Firma". Neue Zürcher Zeitung .
  26. ↑ "FINMA: Anne Héritier Lachat va quitter le monde de la finance". Tribune de Genève . 30 November 2015.
  27. ↑ "Thomas Bauer remplace Anne Héritier Lachat à la présidence de la Finma".
  28. ↑ "Federal Council appoints Marlene Amstad as future FINMA Chair". Federal Council (Press release). 13 March 2020.

Commons-logo.svg Media related to Swiss Financial Market Supervisory Authority at Wikimedia Commons

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.