Being the third largest recipient of requests mostly relating to insider trading, market manipulation and breaching reporting requirements, Swiss cooperation provisions govern FINMA's transmission of information to foreign financial market supervisory authorities. FINMA also receives regular requests for information about fit and proper business conduct.
Requests for assistance from foreign supervisory authorities
FINMA only transmits non-public information and documents to foreign financial market supervisory authorities provided they are bound by official or professional secrecy provisions (confidentiality principle) and use the information exclusively to enforce financial market law (speciality principle) or to pass it on to competent authorities (Art. 42 FINMASA).
Where individual clients are concerned, FINMA has to obtain the clients’ agreement to having the information passing on. If they object, FINMA issues an appealable ruling, in which case the clients can initiate an administrative procedure against having the information passing on (Art. 42a para.2 FINMASA). Only where the Federal Administrative Court (FAC) upholds a client’s appeal are the data not passed on. The FAC is the court of last instance.
If the requesting authority can demonstrate that informing clients would compromise the purpose of the assistance provided and detract from the effective fulfilment of its duties, FINMA then does not notify the clients in advance (Art. 42a para. 2 FINMASA). Reasons for doing so can be the likelihood of destroying evidence, the potential risk of collusion between the suspected parties, asset shifting, other acts of collusion which could affect the confidentiality of the requesting authority’s ongoing proceedings, and imminent limitation. The danger of compromising an investigation relating to market supervision is therefore relatively high, particularly where the requesting foreign authority does not know the identity of the market participants in question when it makes the request.
If the statutory requirements are met, FINMA transfers the information directly to the requesting authority without notifying the clients. As soon as there is no further danger of compromising the investigations, the clients are notified about the transfer of information. Any subsequent rule on action is limited solely to establishing that the transfer of information was unlawful (Art. 42a para. 6 FINMASA).