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Regulation in Switzerland
The following overview provides a detailed view of how providers of asset management services are supervised on the Swiss finance centre.
What makes the Swiss system so unique is the interplay of industry organizations and public supervisory bodies. Lawmakers consciously prefer the option of self-regulation. This allows the industry to create its own codes of conduct (best practice). This code of conduct is distinguished by its close bearing to the market, because the participants contribute their know-how and enforcement occurs flexibly and rapidly. Acceptance among those affected is correspondingly high.
Through the review and recognition of these rules by the supervisory authorities, this code of conduct becomes a component of supervisory regime and the state guarantees their enforcement just as it does state supervisory law.
This form of official sanctioned self-regulation is unique in all the world.
Regulation model of the providers of asset management services
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Provider
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Most important laws
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Specific federal supervision through specially legislated supervisory bodies
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Self-regulation
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Banks
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Federal law regarding banks and savings banks
Federal Act on Stock Exchanges and Securities Trading
Anti-Money Laundering Act
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- direct federal supervision
- the supervisory body is the FINMA. They grant the license to commence business activities and supervise adherence to the license requirements and supervisory specifications.
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Self-regulation is based on the codes of conduct (guidelines and agreements) of the Swiss Bankers Association.
These codes of conduct are enforced by the supervisory authorities as a regulatory minimum standard.
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Securities dealers
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Federal Act on Stock Exchanges and Securities Trading
Anti-Money Laundering Act
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- direct federal supervision
- the supervisory body is the FINMA. They grant the license to commence business activities and supervise adherence to the license requirements and supervisory specifications.
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Self-regulation is based on the codes of conduct (guidelines and agreements) of the Swiss Bankers Association.
These codes of conduct are enforced by the supervisory authorities as a regulatory minimum standard.
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Independent asset managers
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Anti-Money Laundering Act
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- indirect federal supervision
- Official supervision is limited to the prevention and combating of money laundering. The supervisory authority is the FINMA. Supervision of independent asset managers occurs primarily through official supervised self-regulatory bodies.
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The self-regulation is based on the SAAM Code of Ethics and Professional Conduct. An asset manager can avoid compliance with the code of ethics and professional conduct by exiting the Association.
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Asset managers of collective investments
(asset management of collective investment and private and business capital)
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The Federal Act on Collective Investment Schemes
Anti-Money Laundering Act
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- direct federal supervision
- the supervisory body is the FINMA. They grant the license to commence business activities and supervise adherence to the license requirements and supervisory specifications.
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Self-regulation is currently being elaborated by the SAAM and the Swiss Funds Association (SFA).
The code of ethics and profession conduct that will arise from this project will be enforced by the supervisory authorities after they are approved a regulatory minimum standards.
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Fund managers of Swiss investment funds
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The Federal Act on Collective Investment Schemes
Anti-Money Laundering Act
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- direct federal supervision
- the supervisory body is the FINMA. It grants the license for the taking up of business activities and supervises in regard to legal infractions and grievances.
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Self-regulation occurs on the basis of the codes of conduct (guidelines and agreements) through the Swiss Banker Association and the Swiss Funds Association (SFA).
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The SAAM is in favour of self-regulation. This supervisory system is not only more flexible and faster than state legislation, it is also less expensive. It also has proven itself over the past 20 years. The aim is to burden independent asset managers only to the extent necessary through regulation so that they can primarily concentrate on their core business and clients.
The SAAM's self-regulation today includes the most important postulates of internationally recognized supervisory standards for asset management activities.
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