Banks and securities dealers

Legislation on banks and exchanges provides for various types of licences, each with its own conditions.
Banks and securities dealers, as well as branches and representative offices of foreign banks and securities dealers, must be licensed by FINMA. The legislation on banks and exchanges sets out requirements with varying levels of rigour for the different types of licences.

Banks

Any business that involves accepting deposits from the public on a professional basis or publicly advertising such activity requires a banking licence. Anyone offering financing of any kind on their own account to an indeterminate number of individuals or companies that are not part of the same economic unit as themselves and refinancing their business to a considerable extent with a number of independent banks also needs a banking licence. In addition, only licensed banks may accept deposits for the purpose of foreign exchange trading.

In principle, anyone who does not hold a banking licence is not allowed to accept deposits from the public on a professional basis. Any independent activity geared to generating regular income is deemed to be conducted on a professional basis; the assumption is automatic if more than 20 clients are involved. The Banking Ordinance provides for a number of exceptions to the ban on accepting deposits from the public.

Securities dealers

The Stock Exchange Act (SESTA) states that a licence is required for various forms of securities trading – including securities dealers trading in securities under their own name for the account of clients where the securities dealer maintains cash or custody accounts itself or with a third party for such clients (client dealers).

Branches and representative offices

A branch licence is required by any foreign bank or securities dealer employing staff in Switzerland who permanently carry out transactions, trade securities or manage client accounts on its behalf in or from Switzerland on a professional basis that give rise to legal obligations.

A representative office licence is required by any foreign bank or securities dealer employing staff in Switzerland who permanently represent it in or from Switzerland on a professional basis for advertising or other purposes, in particular forwarding client orders to it. Representative offices do not carry out transactions, trade securities, manage client accounts that give rise to legal obligations for foreign banks or securities dealers in or from Switzerland.

FINMA’s licensing activities

FINMA’s tasks in connection with licensing processes are:

FINMA takes appropriate measures – up to and including liquidation – against companies and individuals operating without the requisite licence to restore compliance with the law.