FINMA authorises and licenses operation of companies in the regulated sectors. Licensing is a preventive control tool with which the legislator defines the required level of quality that FINMA should apply equally to all financial market participants. Each licence holder must permanently satisfy the licence conditions or risk having their licences revoked.
Licensing differs from case to case
FINMA issues different types of licences. Many companies are subject to intensive prudential supervision after licensing, whereas others are simply granted one-off registration by FINMA for an activity which is not subsequently monitored by FINMA.
When making investment decisions, financial market clients should consider the type of licence issued to an institution and intensity of supervision to which it is subjected.
FINMA’s role in licensing
What FINMA does:
- FINMA licenses banks, financial institutions and insurance companies, which are then subject to ongoing prudential supervision.
- FINMA authorises fund management companies, custodian banks, asset managers of collective investment schemes (funds) and representatives of foreign collective investment schemes (funds), which are then subject to ongoing prudential supervision.
- FINMA authorises Swiss collective investment schemes (funds).
- FINMA authorises foreign collective investment schemes (funds) which are distributed in or from Switzerland to non-qualified investors.
- FINMA authorises financial market infrastructures such as stock markets, central counterparties and central securities depositories.
- FINMA recognises self-regulatory organisations, which monitor asset managers' compliance with money laundering regulations.
- FINMA authorises financial intermediaries in the non-banking sector that are not affiliated to a self-regulatory organisation. FINMA monitors compliance with money laundering regulations by these financial intermediaries, which are directly subordinated to FINMA.
- FINMA supervises portfolio managers and trustees with the support of a supervisory organisation.
- FINMA licenses the supervisory organisations.
- FINMA provides the requisite authorisation to the registration bodies managing the register of advisers.
What FINMA does not do:
- FINMA does not authorise or supervise investment advisors.
- FINMA does not license or supervise pension funds.