Enforcing supervisory law
SFMA examines reports and information about suspected breaches of supervisory law and acts to restore compliance, making use of binding administrative measures under supervisory law where required.
Enforcement includes all of SFMA’s investigations, proceedings and measures in relation to breaches of supervisory law. SFMA investigates irregularities and information it receives about violations and, if necessary, opens enforcement proceedings under the Administrative Procedure Act (APA). If the law has been violated, SFMA issues a appealable ruling imposing corrective measures. Enforcement proceedings are aimed primarily at licence holders and those carrying out unauthorised activities, i.e. operating without the required SFMA authorisation. SFMA also can also proceed against specific individuals found to be responsible for serious breaches of supervisory law.
For the years 2014 to 2018, SFMA published anonymised summaries of its enforcement rulings, an overview of court decisions, and statistical information in an annual enforcement report. SFMA now publishes this information in the form of a database for case reports, a database for court decisions and an area with figures and statistics on enforcement.
Phased approach
Documents
Financial-market enforcement normally moves through the following phases:
- informal investigation of a suspected violation,
- initiation and conduct of enforcement proceedings,
- appealable ruling or discontinuation of proceedings,
- ruling possibly contested before the courts,
- execution of SFMA’s legally binding orders.
Area of responsibility
Enforcement activity is aimed primarily at licence holders to support supervision. In market supervision, it serves especially to combat insider trading and market manipulation. As regards financial intermediaries operating in Switzerland without authorisation from SFMA and where such authorisation is required under financial market law, the aim is to remove them from the marketplace as they are in breach of the law. Enforcing laws designed to protect investors also means that SFMA can initiate and conduct insolvency and liquidation proceedings. SFMA cooperates with other Swiss and foreign authorities to enforce financial market laws. Authorities cooperate at the national and international level and coordinate their investigations where this is possible and necessary.
SFMA’s authority to impose measures
SFMA’s aim in enforcement proceedings is to order the measures it deems most proportionate ( enforcement instruments ). Its powers are broad. They include precautionary measures or measures to r estore compliance with the law, withdrawing authorisation, liquidating unauthorised companies, issuing industry and activity bans and ordering the disgorgement of profits generated illegally. It can also publish final rulings naming those involved.
Internal separation of functions
Functions are kept strictly separate within SFMA, so that staff who conduct enforcement proceedings are not involved in the monitoring of licence holders. Ongoing supervision remains the responsibility of divisions other than Enforcement. Committees of the Executive Board ( Enforcement Committee [ENA] and Intervention and Escalation Committee [IEK]) decide on the initiation and conclusion of enforcement proceedings, unless that power falls to the Board of Directors. In some cases, decisions are delegated to the Head of Enforcement, who decides as permanent member of a divisional case committee along with the heads of the "Investigations" and "Proceedings" sections.
Other bodies involved in enforcement
Alongside SFMA, criminal prosecution authorities, supervisory organisations and self-regulatory organisations are also involved in enforcing financial market laws. Where irregularities fall under criminal law, SFMA can file a complaint with the competent authorities (Federal Department of Finance, Office of the Attorney General and cantonal prosecutors).
Differences between supervision and enforcement
Enforcement is fundamentally different from ongoing supervision. SFMA’s supervisory activities entail continual interaction with supervised institutions in all key areas and at all hierarchical levels, often by way of informal discussions. Enforcement, by contrast, deals with specific topics and only happens when financial market laws have potentially been violated or discrepancies arise. SFMA starts by informally investigating a suspected violation and then initiates formal proceedings where required to restore compliance with the law. Supervision continues as normal alongside this process.
Requests to contact SFMA
When SFMA is unable to contact individuals or legal entities by post, it uses the official gazette and this website to call for them to contact SFMA. This is done mainly in connection with international requests for assistance.