REVIEW - Swiss Financial Market Supervisory Authority (FINMA)

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Authorities around the world are working hard to regulate various industries. Companies, as well as individuals, should learn more about the laws and regulations. Let’s have a look at FINMA, which is the Swiss Financial Market Supervisory Authority.

It is worth noting that FINMA is Switzerland’s independent financial-markets regulator. It has the authority to supervise banks, insurance companies, financial institutions, collective investment schemes, as well as their asset managers, and fund management companies.

Moreover, FINMA also regulates insurance intermediaries. Also, the institution based in Bern which is the facto capital of Switzerland protects creditors, investors, as well as policymakers. People should consider that FINMA is responsible for ensuring that the country’s financial markets are working efficiently.

Importantly, FINMA commenced its activities more than 10 years ago, on Jan 1, 2009. The country’s parliament granted it a greater degree of independence compared to its three predecessor institutions. Furthermore, thanks to institutional, functional as well as financial independence, the supervisory authority can effectively supervise the country’s financial industry.

People should take into account that FINMA was established as a public law institution in its own right. Moreover, the institution is functionally independent of Switzerland’s political authorities. Thus, neither the country’s government nor the Swiss Parliament can issue directives on how to fulfill its regulatory duties.

Interestingly, FINMA is mandated to protect financial market clients: creditors, investors, as well as policyholders. Moreover, it is responsible to ensure that the country’s financial markets function effectively.

Let’s have a look at its supervisory tasks. The institution is responsible for authorization, supervision and when necessary the enforcement of supervisory law. Moreover, the FINMA can also regulate activities when it is authorized to do so.

Importantly, when it comes to supervisory activities, FINMA adopts a systematic risk-oriented approach.

Supervisory Authority and its Activities

The Swiss Financial Market Supervisory Authority (FINMA) supervises the financial market by issuing licenses as well as monitoring license holders on a regular basis. Furthermore, it has the ability to implement measures and to enforce the law, where authorized to do so. Moreover, FINMA issues its own regulations.

It is supervising the financial market in the country, as set out in the Financial Market Supervision Act as well as other financial market laws for each specific sector of the respective industry.

Moreover, a FINMA license authorizes natural persons as well as legal entities to engage in financial market activity. It is worth mentioning that financial market legislation sets out varying levels of strict requirements when it comes to different forms of licensing. For example, FINMA has the authority to issue a license that comes with intensive prudential supervision. However, there is also a simple form of registration with no subsequent ongoing supervision by FINMA.

Notably, licensed banks, insurance companies, financial institutions, collective investment schemes, and their asset managers as well as fund management companies are subject to prudential supervision. It means that FINMA monitors their activities in accordance with a risk-based approach. As stated above, FINMA’s mandate is to protect investors, creditors, as well as insured people against various problems. For example, against the consequences, if a company becomes insolvent, unfair commercial practices, and unequal treatment.

The Swiss Financial Market Supervisory Authority has the authority to investigate any violation of supervisory legislation, as well as to take all necessary measures to restore compliance with the law.

Financial Market Supervisory Authority and International Cooperation

Hopefully, FINMA actively participates in the work of various international organizations as well as associations. Moreover, FINMA works with foreign supervisory authorities as part of international supervisory cooperation efforts. Especially, when it comes to supervisory or enforcement proceedings.

It fulfills the international tasks connected with supervisory activity. It is possible to divide its international activities into three main areas.

Importantly, as part of its international policy and regulatory cooperation, FINA works with international organizations. Moreover, it represents Swiss interests when it comes to the international coordination of appropriate protection for creditors, investors, and policymakers.

Also, FINMA participates in discussions as well as negotiations led by the Federal Department of Finance. Notably, the Federal Department of Finance protects the country’s interests in international financial topics. The Swiss Financial Market Supervisory Authority supports the Federal Department by providing its expertise.

Notably, this cooperation with the provisions of Swiss law, which are partially supplemented in treaties or substantiated in non-binding international administrative arrangements.

Reprinted from financialbrokerage, the copyright all reserved by the original author.