FINMA typically conducts financial market enforcement proceedings in three stages: the first stage involves making preliminary enquiries before initiating actual 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 enquiry stage, FINMA seeks to establish if there are reasonable grounds for believing that a supervised company, 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 an administrative proceeding.
- If there is sufficiently strong evidence of a supervisory violation and there is no other way to rectify the situation, FINMA will initiate an investigation i.e. administrative proceedings. Notice of such proceedings is generally issued to the affected parties in writing (Art. 30 of the Swiss Financial Market Supervision Act ("FINMASA"). FINMA initially investigates the facts of the case and may take evidence from the parties and examine witnesses for this purpose. If appropriate, FINMA may make an interlocutory order at this stage, for example for the appointment of an investigating agent (Art. 36 FINMASA). Once FINMA has established the facts, it will invite the parties to comment. Having considered the submissions of the parties, the responsible group within the Enforcement section refers the matter to the Management Board Enforcement Committee or to the 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 section will monitor the appeal process until a final judgment on the matter is delivered 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 section remains responsible for implementation or the matter is referred to the section in charge of ongoing regulatory activities. One specific form of implementation is the initiation of bankruptcy proceedings against licence holders under the Swiss Banking Act or Stock Exchange Act (insolvency proceedings)