FINMA
Parliament approved the Federal Act on the Swiss Financial Market Supervisory Authority (FINMASA) on 22 June 2007. The Federal Council ratified the implementing provisions for FINMASA on 15 October 2008, with the Act entering into full force on 1 January 2009.
The aim of the new Financial Market Supervisory Authority
The object of FINMASA is to group together under one authority the government supervision of banks, insurance companies, stock exchanges and securities dealers as well as other financial intermediaries in Switzerland. The Act merges three bodies – the Federal Office of Private Insurance (FOPI), the Swiss Federal Banking Commission (SFBC) and the Anti-Money Laundering Control Authority – into the Swiss Financial Market Supervisory Authority FINMA.
The aim of the financial market supervisory authority is to protect creditors, investors, insured persons and to ensure the general functioning of the financial markets in accordance with financial market legislation. It thus helps reinforce Switzerland’s image and competitiveness as a financial centre (Article 5, FINMASA).
Organisational reorientation:
With a GDP contribution of 12% and a workforce of around 200,000, the financial sector plays a significant role in the Swiss economy. At the same time, and as the financial market crisis has so clearly demonstrated, the sheer magnitude and degree of interdependence in the financial sector have given rise to systemic risks that could have a negative impact on the entire economy in Switzerland.
Against the backdrop of the extremely dynamic developments in the financial markets and the ever increasing complexity of financial market supervision, the institutional structure of the existing supervisory bodies is being enhanced. With the establishment of an integrated financial market supervisory authority, an organisational reorientation is underway to strengthen financial market supervision in Switzerland and to give it greater weight on an international scale.
Corporate governance and code of conduct:
FINMA is structured as an institution under public law. It has functional, institutional and financial independence as well as a modern management structure with a Board of Directors, Executive Board and the Swiss Federal Audit Office as external auditor. As a counterbalance to FINMA’s independence, it has been made accountable to and is subject to the overall political supervision of the Federal Government.
It is of vital importance to FINMA that the people who are active on its behalf conduct themselves with integrity and refrain from any activity that could jeopardise its image and credibility. The code of conduct issued by FINMA sets out strict instructions, particularly with regard to conflicts of interest that may arise in connection with activities carried out on FINMA’s behalf. This code of conduct is directed at all persons acting for FINMA, namely the Board of Directors and all staff members, whether they are employed on either a permanent or temporary basis.
Seven pieces of legislation under the FINMASA umbrella:
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 laws governing financial market supervision. The legal mandate conferred on the supervisory authority remains unchanged, however, and takes into account the specifities of the different areas of supervision. Banks, securities dealers, stock exchanges, insurers and collective investment schemes must thus continue to satisfy the respective legal criteria (see below). The system of self-regulation established under the Anti-Money Laundering Act and the Stock Exchange Act will likewise be maintained.
With FINMASA, two implementing ordinances were approved to take effect on 1 January 2009.
- The ordinance governing the levying of fees and duties by the Swiss Financial Market Supervisory Authority passes on the costs of supervision to the individual areas supervised, as far as possible applying the ‘user pays’ principle and without cross-subsidising.
- The financial market audit ordinance groups together in a single ordinance the provisions governing financial market auditing.
FINMA employs around 320 people. Its staff is made up of a broad range of specialists working together on an interdisciplinary basis. They are specialists from the fields of law, economics, mathematics, auditing, the actuarial profession, accounting and investment, amongst others.
The Board of Directors of FINMA, as strategic management body, has seven to nine independent expert members, pursuant to FINMASA. 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.
Taking due account of corporate governance considerations, the following Board of Directors Committees have been set up from among the members of the Board of Directors:
- The appointment and remuneration committee carries out the preparatory work on which the Board of Directors bases its personnel decisions.
- The audit committee, as an independent specialist committee, provides substantial support to the Board of Directors in its monitoring activities.
- The strategy committee steers the strategy development process and makes proposals regarding the areas of FINMA’s strategic focus to the attention of the Board of Directors.
In addition, the Board of Directors recruits specialised members from among its ranks to perform an advisory role for the Board of Directors and the Executive Board. These specialists are accorded in-depth insight into concrete regulatory initiatives in relation to the respective supervisory laws and bring their specific areas of expertise and the strategic view of the Board of Directors to bear at an early stage by accompanying the regulatory work. In addition, the specialist areas Risk Management and Auditing will be established to function on a cross-legislative basis.
Lastly, the Board of Directors maintains institutionalised contact at the highest management level with key authorities and organisations in Switzerland and abroad. It thus has the opportunity to raise important developments and issues with selected stakeholders.
Executive Board:
The Executive Board is FINMA’s operational management body and is responsible for supervising banks, insurers, stock exchanges, securities dealers and other financial intermediaries in accordance with the law and respective strategy. It prepares the necessary files and materials for decisions on items of business that fall under the remit of the Board of Directors and reports to the Board of Directors regularly and, in the case of special events, immediately. It is responsible for implementing the resolutions of the Board of Directors and its committees, and issues rulings on all matters that do not fall to the Board of Directors. The Executive Board decides as a collective body on matters such as the granting of licences of a general nature, key management, organisational and personnel issues, directives not requiring Board of Directors approval, and supervisory matters of cross-segmental significance. The Executive Board also operates an appropriate internal control system and reports regularly to the Board of Directors on the effectiveness of such. ©
Contacts:
Postal address of FINMA until 30 June 2009:
Swiss Financial Market Supervisory
Authority FINMA
Schwanengasse 2 CH – 3003 Bern
Locations of FINMA until 30 June 2009:
Schwanengasse 2, Bern
Schwanengasse 12, Bern
Christoffelgasse 5, Bern
Location of FINMA from 1 July 2009:
Swiss Financial Market Supervisory Authority FINMA
Einsteinstrasse 2 CH – 3003 Berne
Tel +41 31 327 91 00 Fax +41 31 327 91 01
info@finma.ch
http://www.finma.ch
Office hours
Monday to Friday: 8 a.m. to 5p.m.