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Insolvency proceedings

FINMA is responsible both for commencing and conducting restructuring and bankruptcy proceedings in relation to individuals and legal entities carrying on business as a bank or as a securities dealer, for which a licence is required. It also has a right to participate in insolvency proceedings relating to insurance companies and the bankruptcy court is bound to take this right into account. Where FINMA is responsible for commencing bankruptcy or restructuring proceedings, it does not merely perform the function of judge and supervisory authority in relation to the appointed liquidators, committees of creditors and restructuring agents, but also discharges the duty of insolvency administrator. In addition, bank depositors, investors in relation to securities dealers and policyholders of insolvent insurance companies benefit from special protective provisions (cf. also: Investor protection and Tied assets).

As is the case with bankruptcy proceedings falling within FINMA's remit, the proceedings required for the restructuring of banks and securities dealers are distinct and separate and geared to the specific needs of the financial sector. The purpose of restructuring is to enable ailing financial institutions to continue in business or to ensure that specific services can still be provided. However, restructuring proceedings are not available if a licence has already been revoked or it is not possible to grant a retrospective licence to entities engaging in unauthorised activity.