A financial group is a group of companies that form a single economic unit or are bound by mutual support obligations, active mainly in the financial sector and including at least one bank or securities dealer. Groups that include at least one insurance company are referred to as financial conglomerates.
Requirements for consolidated supervision
FINMA can make financial groups and financial conglomerates subject to consolidated supervision over and above the supervision of single entities. In justified cases, notably when a single entity has no material significance for consolidated supervision, FINMA can exempt that company from consolidated supervision or declare it only partially applicable. However, it can also include companies that are active in the financial sector but controlled jointly with third parties in consolidated supervision.
Scope of consolidated supervision
FINMA determines the scope of consolidated supervision on a case-by-case basis. In particular, it verifies that a banking or securities trading group:
- is appropriately organised;
has an internal control system that identifies, limits and monitors business risks;
is managed by staff who assure proper business conduct;
separates the functions of executive management and of overall direction, oversight and control;
complies with capital adequacy and risk diversification rules;
has sufficient liquidity;
applies accounting principles correctly;
and has appointed a recognised, independent and professional audit firm.