Self-regulatory organisations (SROs)

The Anti-Money Laundering Act states that financial intermediaries must become members of a self-regulatory organisation (SRO) under civil law as a way of preventing money laundering.

SROs define the due diligence requirements under AMLA in the form of regulations and monitor whether affiliated financial intermediaries comply with them. SROs must also establish controls to ensure that affiliated financial intermediaries meet their obligations.

Recognition as an SRO

SROs define the due diligence requirements under AMLA in the form of regulations and monitor whether affiliated financial intermediaries comply with them. SROs must also establish controls to ensure that affiliated financial intermediaries meet their obligations.

For their part, SROs are subject to supervision by FINMA, which recognises and monitors them. FINMA recognises an organisation as an SRO if it:

  • has a set of regulations which set out the AMLA due diligence requirements in detail for its members;

  • monitors compliance with these regulations by affiliated financial intermediaries;

  • can give a guarantee of irreproachable business activity and ensures that audit firms and other individuals tasked with implementing these controls meet the requirements in terms of proper business conduct, independence and appropriate qualifications; and

  • ensures that the audit firms and lead auditors tasked with implementing these controls meet the authorisation requirements as defined in the AMLA.

FINMA can conduct on-site inspections at SROs or delegate these activities to audit firms. SROs must report any organisational changes to FINMA.

If an SRO then no longer meets the recognition requirements, FINMA will issue a warning and may withdraw recognition.

SRO regulations

SRO regulations and any amendments to them must be approved by FINMA. They define how affiliated financial intermediaries must implement the legal requirements under AMLA, including the requirement to establish the identity of all contractual partners and beneficial owners and the duty to report any suspicion of money laundering. They also define how SROs monitor compliance with these requirements (e.g. through periodic checks by internal or external auditors) and how breaches of the requirements are penalised. An SRO can impose penalties on its members and suspend them.

Backgroundimage