Cease and desist orders and trading bans

Where FINMA identifies financial market participants operating without the requisite authorisation, it can issue a ruling expressly banning those responsible from continuing to operate. It also has the power to ban securities dealers’ employees who have committed serious violations of stock exchange law from trading.
FINMA can issue a ruling banning individuals responsible for violations by financial intermediaries from conducting unauthorised financial market activities themselves or through third parties or from advertising such activities in any form. A ban of this kind normally concerns a company’s ultimate management, owners and senior staff, but other individuals who have contributed substantially to unauthorised activities can also be banned. FINMA often combines a cease and desist order with the threat of a fine under Article 48 FINMASA and publication of the final ruling under Article 34 FINMASA.

Effects of a cease and desist order

Such orders are intended to warn or remind individuals not to engage in activities requiring authorisation. Those concerned – together with the general public if details are published – are merely reminded of the law. FINMA aims first and foremost to warn investors about these individuals.

Trading bans

Article 35a SESTA allows FINMA to ban individuals temporarily or permanently from engaging in securities trading if they have committed a serious violation of the Act, its implementing ordinance or a company’s internal rules. In addition to staff in senior functions and those bound by proper business conduct requirements, all employees of a securities dealer or a bank with securities dealer authorisation who are involved in trading can be banned in this way.