FINMA (Swiss Financial Market Supervisory Authority)

The Swiss Financial Market Supervisory Authority (FINMA, from its German name Eidgenössische Finanzmarktaufsicht) is Switzerland's integrated financial regulator. Banks, insurers, securities firms, fund managers, financial market infrastructures and Swiss fintech licensees all need its license and fall under its supervision. FINMA also recognizes the self-regulatory organizations (SROs) to which many other financial intermediaries belong, and it monitors how those bodies police their members' anti-money-laundering compliance. Because most Swiss payment, remittance and crypto firms fall into that last category, they typically deal with a self-regulatory organization day to day rather than with FINMA directly.

FINMA is an independent public-law institution based in Bern and funded mainly by fees and levies from supervised entities. For its full profile, see the FINMA regulator profile.

FINMA began operating on 1 January 2009 under the Financial Market Supervision Act (FINMASA). It merged three predecessors: the Swiss Federal Banking Commission, the Federal Office of Private Insurance and the Anti-Money Laundering Control Authority. The merger brought prudential supervision, conduct supervision and AML oversight under one roof, a model similar to the integrated regulators of several other countries. Monetary policy and the oversight of systemically important payment systems remain with the Swiss National Bank.

Swiss anti-money-laundering law is set out mainly in the Anti-Money Laundering Act of 1997 (AMLA). It applies to banks and other prudentially supervised institutions, and also to a broad class of "financial intermediaries" that are not otherwise licensed, including money transmitters, currency exchange offices, payment service providers, asset managers in some respects and many virtual asset businesses.

Intermediaries in that second group have two options. They can join a self-regulatory organization (SRO) recognized by FINMA, which admits them, sets AML rules approved by FINMA, conducts audits and imposes sanctions on its members. Several SROs exist, including the VQF, which has a large fintech and crypto membership. Historically, intermediaries could alternatively be supervised directly by FINMA, but in practice the SRO route dominates. SRO membership is not a license to take deposits or carry on banking business; it confirms only that the firm is subject to AML supervision.

• Banking license under the Banking Act, required to accept deposits from the public on a professional basis.
• Fintech license, introduced on 1 January 2019, which allows a firm to accept public deposits up to CHF 100 million provided it does not invest them or pay interest on them. It suits payment and account businesses that need to hold client balances.
• Securities firm, fund management and portfolio manager authorizations under the Financial Institutions Act.
• Insurance licenses under the Insurance Supervision Act.
• DLT trading facility licenses introduced by the 2021 amendments known as the DLT Act, which also created rules for ledger-based securities.

FINMA was early in publishing guidance for initial coin offerings in 2018 and has applied the FATF Travel Rule strictly, requiring Swiss institutions to transmit originator and beneficiary information for virtual asset transfers and limiting transfers to unhosted wallets unless ownership is verified. It has also issued guidance on stablecoins, generally requiring a bank guarantee or a banking license for issuers holding client funds. These positions make Switzerland a reference point in discussions of virtual asset service provider regulation.

FINMA can withdraw licenses, appoint investigators, confiscate profits and ban individuals from management roles, but unlike many regulators it cannot impose fines. That limitation drew criticism during the collapse of Credit Suisse in 2023, when the bank was taken over by UBS in a government-brokered deal. FINMA ordered the write-down of about CHF 16 billion of Credit Suisse's Additional Tier 1 bonds, a decision challenged in the Swiss courts. A parliamentary inquiry and expert reviews afterwards recommended stronger powers for FINMA, including the ability to impose fines.

FINMA participates in international standard-setting, including the Basel Committee on Banking Supervision and the Financial Stability Board. Switzerland is a member of the FATF, and FATF evaluations of Switzerland have assessed both FINMA and the SRO system. Firms entering Switzerland from the European Union cannot rely on passporting, because Switzerland is outside the EU single market for financial services.

• Swiss Financial Market Supervisory Authority (FINMA)