Switzerland

Financial Market Regulation and Supervision in Switzerland

Daniel Hayek and Christoph Erdin, Attorneys at Law, Prager Dreifuss

Financial system regulation and supervision in Switzerland is conducted by three main agencies: the Swiss Federal Banking Commission (FBC) for banking, securities and investment funds, the Federal Office of Private Insurance (FOPI) for insurance and reinsurance and the Federal Social Insurance Office (FSIO) for pension funds. The subjects of supervision are institutions, conduct of business, products and markets. None of the supervisory agencies have legal powers extending to financial conglomerates, although the FBC has established through case law its right to conduct consolidated supervision of bank-led groups. If such bank-led groups also include insurance companies, the FBC is responsible for the consolidated supervision of the group, while the FOPI is responsible for the supervision of the insurance subsidiaries. With respect to insurance-led groups the FOPI acts as consolidated supervisor, whereas the FBC remains responsible for any banking and securities entities in the group. Several administrative agreements have been set up between the two agencies to coordinate their activities with respect to financial conglomerates.