SFMA and law enforcement
SFMA corrects violations of the law and other irregularities. It implements supervisory law by means of the statutory measures provided.
One of the fundamental tenets of the Financial Market Supervision Act is the separation of preventive supervision and repressive enforcement. If SFMA discovers violations of the law and other irregularities, it corrects them and enforces supervisory law.
Objectives of enforcement
The aim of enforcement is to establish whether a financial market participant – either supervised or unauthorised – has violated supervisory law. SFMA investigates and clarifies the circumstances and, when required, conducts formal administrative proceedings. The objective of such enforcement proceedings is to restore compliance with the law.
Enforcement tools
Once the enforcement proceedings are concluded, a ruling is issued: profits may be confiscated, professional restrictions imposed or organisational amendments required to ensure that the same error is not repeated. In extreme cases, proceedings may lead to revocation of a licence or liquidation of a company.
Recourse against SFMA rulings
Rulings issued by SFMA may be challenged and may thus be subject to judicial review. In contentious cases, the Federal Administrative Court or the Federal Supreme Court has the final say. If SFMA has reasonable grounds for suspecting an offence, it may file criminal complaints with the Legal Service of the Federal Department of Finance.
SFMA’s role in enforcement
The related information for this topic is set out in the following section.
What SFMA does
- SFMA ensures that compliance with the law is restored, if supervisory requirements are violated.
- SFMA imposes measures ranging from establishing a violation of the law to revocation of a licence or liquidation of the respective company.
- SFMA may also issue an industry ban and confiscate profits generated illegally.
- SFMA files complaints with the criminal authorities, if it has knowledge of a crime, offence or infringement of financial market legislation.
- SFMA conducts restructuring proceedings.
- SFMA ensures the orderly exit of a company by means of bankruptcy.
- SFMA initiates proceedings, if holdings in companies listed in Switzerland are not correctly disclosed.
- SFMA takes action against market abuses such as inadmissible use of insider information.
- SFMA takes action against financial intermediaries operating without authorisation.
What SFMA does not do
- SFMA does not conduct criminal proceedings and does not impose penalties.
- SFMA is not responsible for civil disputes.
- SFMA has no authority to impose fines.
- SFMA may not order any coercive measures, such as searches of premises or seizure of evidence, during the course of its investigations.
- SFMA does not actively search for institutions operating without authorisation, but it does intervene if it has real evidence of unauthorised activity.
- SFMA may only take action against organisational units domiciled in Switzerland, if a foreign institution operates in Switzerland via a branch or subsidiary. No measures may be taken against the foreign parent company.