FINMA - Swiss Financial Market Supervisory Authority

What is FINMA?

The Swiss Financial Market Supervisory Authority (FINMA) is an independent public law institution responsible for financial market supervision in Switzerland. Established in 2009, FINMA consolidated the supervision of banks, insurance companies, and securities markets under one roof.

Core Mandate and Objectives

Protection of Creditors, Investors, and Insured Persons

FINMA's primary mission is to protect clients and stakeholders of supervised institutions:

• Ensuring fair treatment of customers
• Protecting depositors and insurance policyholders
• Safeguarding investor interests in securities markets
• Monitoring compliance with consumer protection rules

Ensuring Proper Functioning of Financial Markets

• Maintaining market integrity and transparency
• Preventing market abuse and manipulation
• Ensuring adequate market infrastructure
• Promoting fair competition in financial services

Enhancing Switzerland's Reputation and Competitiveness

• Maintaining high regulatory standards
• Promoting international cooperation
• Supporting Switzerland as a financial center
• Adapting regulations to global developments

Supervised Sectors and Institutions

Banks and Banking

• Commercial banks: UBS, Credit Suisse, cantonal banks
• Private banks: Wealth management specialists
• Foreign banks: Swiss branches of international banks
• Specialized banks: Mortgage banks, trading banks

Insurance Companies

• Life insurance: Individual and group life policies
• Non-life insurance: Property, casualty, and health insurance
• Reinsurance: Swiss Re and other reinsurers
• Insurance intermediaries: Brokers and agents

Securities Markets and Investment Funds

• Stock exchanges: SIX Swiss Exchange
• Investment funds: Mutual funds and ETFs
• Asset managers: Portfolio management companies
• Securities dealers: Investment firms and traders

Other Financial Service Providers

• Payment service providers: Money transfer companies
• Collective investment schemes: Various fund structures
• Audit companies: Specialized financial audit firms

Regulatory Powers and Tools

Licensing and Authorization

• Granting and withdrawing banking licenses
• Authorizing insurance companies to operate
• Licensing fund management companies
• Approving market infrastructure operators

Ongoing Supervision

• Regular on-site inspections and examinations
• Off-site monitoring through financial reports
• Risk assessment and early warning systems
• Stress testing of financial institutions

Enforcement Actions

• Issuing supervisory measures and orders
• Imposing fines and penalties
• Restricting business activities
• Initiating criminal proceedings when appropriate

Key Areas of Focus

Anti-Money Laundering (AML)

FINMA ensures Swiss financial institutions comply with anti-money laundering laws:

• Know Your Customer (KYC) requirements
• Suspicious transaction reporting
• Due diligence for high-risk clients
• Regular AML audits and assessments

Cybersecurity and Operational Risks

• IT security requirements for financial institutions
• Business continuity and disaster recovery planning
• Outsourcing risk management
• Data protection and privacy compliance

Sustainable Finance

• Climate-related financial risk disclosures
• ESG (Environmental, Social, Governance) considerations
• Green finance product regulation
• Sustainability risk management

International Cooperation

Global Regulatory Coordination

• Basel Committee: International banking regulation
• IOSCO: Securities market regulation cooperation
• IAIS: International insurance supervision
• FSB: Financial Stability Board participation

Bilateral Agreements

• Memoranda of Understanding (MoUs) with foreign regulators
• Information sharing agreements
• Cross-border supervision coordination
• Joint examinations of international institutions

Recent Developments and Initiatives

Fintech and Digital Innovation

• Fintech licensing framework
• Regulatory sandbox for innovative financial services
• Cryptocurrency and digital asset regulation
• Open banking and PSD2 implementation

Regulatory Reform

• Too Big to Fail (TBTF) regulations
• Capital adequacy requirements
• Liquidity coverage ratios
• Recovery and resolution planning

How FINMA Protects Consumers

Transparency and Disclosure

• Requiring clear product information
• Fee and cost transparency
• Risk disclosures for investment products
• Regular public warnings about unauthorized providers

Public Warnings

FINMA regularly publishes warnings about:

• Unauthorized financial service providers
• Fraudulent investment schemes
• Suspicious online platforms
• Unregulated cryptocurrency offerings

Comparison with UK Regulators

Similar Functions

• FCA (Financial Conduct Authority): Market conduct and consumer protection
• PRA (Prudential Regulation Authority): Bank and insurer safety and soundness
• Bank of England: Systemic risk oversight (FINMA cooperates with SNB)

Key Statistics and Facts

Future Challenges

Emerging Technologies

• Artificial intelligence in financial services
• Blockchain and distributed ledger technology
• Central bank digital currencies (CBDCs)
• Quantum computing implications for cybersecurity

Global Regulatory Harmonization

• Cross-border data sharing requirements
• International tax compliance (FATCA, CRS)
• Global systemically important institutions oversight
• Climate risk stress testing coordination