CISA supervisory approach

CISA licence holders are subject to risk-based supervision by FINMA. There are six different supervisory categories. The supervisory intensity and tools used depend on the institution's category and on periodic ratings.

FINMA adopts a risk-based approach to asset management. There are six different supervisory categories to which licence holders are assigned, depending on their potential risk impact on creditors, investors, the system as a whole and the reputation of the Swiss financial centre. Licence holders of major and global systemic importance exposed to significant risks are assigned to category 1. The risk potential of the institutions in the other categories decreases gradually down to category 5. Market participants in category 6 are not placed under prudential supervision.

CISA licence holders: risk categories 4 to 5

CISA licence holders are assigned to supervisory categories 4 and 5. Fund management companies and asset managers with assets under management and/or administration of CHF 30 bn or more are allocated to the supervisory category 4. As well as being assigned to a risk category, each licence holder is given a periodic rating which reflects FINMA's assessment of its current situation, especially as regards its financial circumstances, organization, managed products and the adherence to conduct rules.

Based on these two variables (i.e. category and rating), FINMA defines the intensity of supervisory and the tools to be used. FINMA has three different tools at its disposal: indirect supervision, direct supervision and market data collection.