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Typical investigation procedure

FINMA typically conducts financial market enforcement proceedings in three stages: the first stage involves making preliminary investigations before initiating administrative proceedings in the second stage. Once a final and binding decision has been made, the third stage involves implementing the specific measures ordered by FINMA.

  • At the preliminary investigation stage, FINMA seeks to establish if there are reasonable grounds for believing that a supervised institution, or even an individual, has committed any supervisory breach such as to warrant a detailed and potentially extensive investigation of the case in the course of administrative proceedings.
  • If there are indications of a breach of supervisory law and there is no other way to restore compliance with the law, FINMA will initiate an investigation, i.e. administrative proceedings. Notice of such proceedings is generally issued to the affected parties in writing (Art. 30 FINMASA). FINMA initially investigates the facts of the case and  may conduct evidentiary hearings with the parties and witnesses for this purpose. If appropriate, FINMA may make an interlocutory order at this stage, for example appointing an investigating agent (Art. 36 FINMASA). Once FINMA has established the facts, it invites the parties to comment. Having considered the submissions of the parties, the competent group of the Enforcement division refers the matter to the Enforcement Committee of the Executive Board (ENA) or to the FINMA Board of Directors. If FINMA has made a ruling and an appeal against the decision is lodged with the Federal Administrative Court, the same person in charge of the litigation in the Enforcement division will monitor the appeal process until a final decision on the matter is made by the Federal Administrative Court or Federal Supreme Court.
  • Once a final decision has entered into force and the administrative proceedings brought to a close, the decision must be implemented. Depending on the substance of the ruling, either the Enforcement division remains responsible for implementation or the matter is referred to the division in charge of ongoing supervisory activities. Specific forms  of implementation are conducted in liquidation proceedings under the Swiss Code of Obligations, and restructuring and bankruptcy proceedings against institutions requiring authorisation under financial market law (insolvency proceedings), all of which are carried out as administrative proceedings.