The financial markets are among the most heavily regulated sectors of the economy. Important goals of financial market regulation include protection of the individual (protection of creditors, investors, and insured persons), system stability, and ensuring the smooth functioning of the financial markets.
Owing to the increasing cross-border integration of financial markets, international standards have a substantial impact on financial market regulation. Switzerland participates in the corresponding international bodies in order to contribute actively to shaping those standards. In light of these developments, Switzerland has completely revised its financial market regulation in recent years. In doing so, one goal has been to preserve the competitiveness of its financial centre.
Regulation as a challenge
New areas of regulation have emerged or have grown considerably in importance, e.g. steps to boost stability in the financial sector, measures to combat money laundering, corruption and terrorist financing, and issues concerning consumer protection.
Financial market regulation in Switzerland primarily consists in:
- the Financial Market Supervision Act (FINMA Act);
- the financial market laws (Banking Act; Collective Investment Schemes Act; Stock Exchange Act; Anti-Money Laundering Act; Insurance Supervision Act; Mortgage Bond Act; Insurance Contract Act);
- the ordinances issued by the Federal Council on financial market laws (Financial Market Audit Ordinance; Banking Ordinance; Capital Adequacy Ordinance; Collective Investment Schemes Ordinance; Stock Exchange Ordinance; Insurance Oversight Ordinance; Mortgage Bond Ordinance); and
- the ordinances and circulars issued by the Swiss Financial Market Supervisory Authority (FINMA).
Financial market supervision in Switzerland
FINMA is responsible for the supervision of financial institutions in Switzerland. For its part, the Swiss National Bank fulfils the typical function of a central bank as lender of last resort, i.e. it is the last source of liquidity in the event that a bank or a group of banks should end up facing a liquidity bottleneck. It also gathers statistics for FINMA and publishes its periodic stability report.
Last modification 23.06.2016