Banks and securities firms

Banks and securities firms need a licence before they can operate in Switzerland. The law provides different authorisation paths, and each path has its own conditions, documentation and supervisory expectations.

The authorisation review focuses on whether the applicant can conduct its business in a sound and compliant manner. SFMA examines the business plan, ownership, governance, capital, liquidity, risk controls, internal organisation, outsourcing, audit arrangements and the fitness and propriety of the people responsible for management and oversight.

A licensing file should give the authority a clear picture of how the institution will earn revenue, where material risks arise, how decisions are made and how clients and counterparties will be protected. Incomplete descriptions of group links, outsourcing chains, IT systems or risk limits commonly lead to follow-up questions because they make it difficult to assess the planned activity as a whole.

Banks

A bank licence is required where an institution accepts deposits from the public or presents itself as carrying out banking activity. Applicants must show that they have adequate capital, suitable organisation, independent control functions and reliable management. The licensing process also looks at the proposed services, client groups, balance-sheet structure and risk profile.

The assessment covers both the legal entity and the broader environment in which it operates. Where the applicant belongs to a financial group, SFMA considers ownership, intra-group services, guarantees, funding flows and whether effective supervision is possible at group level. Newly established banks should also explain how they will scale operations without weakening controls.

Foreign banking groups that want to establish a Swiss presence may need authorisation for a branch or representative office. The assessment includes the home supervision environment, cooperation with foreign authorities and the exact nature of the activities planned in Switzerland.

Securities firms

Securities firms require authorisation when they trade securities professionally for clients, on their own account under the conditions set by law, or when they provide market-making or underwriting services. The applicant must demonstrate robust trading controls, segregation of duties, client asset protection, transaction monitoring and sufficient expertise in the relevant markets.

Trading activity can create market, liquidity, operational and conduct risks. The applicant should therefore document order handling, best execution controls, personal account dealing rules, market abuse prevention, reconciliation, custody interfaces and the escalation process for incidents.

Branches and representative offices

Branches and representative offices of foreign banks and securities firms are treated according to their function. A branch may conduct business more directly and therefore faces more extensive requirements. A representative office is generally limited to representation and client acquisition activities, but it still needs a compliant structure and clear connection to the foreign institution.

Licensing activity

SFMA reviews applications before business begins and expects applicants to present complete, consistent documentation. After authorisation, banks and securities firms remain subject to supervision, external audit and notification obligations when material circumstances change. Changes in ownership, management, business fields, foreign operations or outsourcing arrangements should be assessed early so that any required approval can be obtained before implementation.