On-site supervisory reviews

Under certain circumstances, FINMA can permit foreign financial market supervisory authorities or their mandataries to carry out direct cross-border audits of Swiss supervised institutions. Conversely, FINMA may also carry out on-site supervisory reviews abroad itself or have them carried out.

On-site supervisory reviews by foreign financial market supervisory authorities in Switzerland

Supervisory reviews of this kind must be essential for the requesting authority’s own supervisory activities. Article 43 FINMASA sets out two possibilities where the requesting financial market authority is:

  • either responsible for supervising the audited supervised institution as part of home country supervision
  • or responsible for supervising the activity of the audited supervised institution in its territory.

In practice, other less comprehensive reviews also take place on Swiss territory between Swiss supervised institutions and foreign financial market supervisory authorities.

To clarify this situation, FINMA has published guidelines setting out the various forms of information exchange. The guidelines define the required contents of notifications and requests in this context and are intended to simplify the process by which Swiss supervised institutions meet foreign financial market supervisory authorities on Swiss territory.

On-site supervisory reviews by FINMA abroad

In order to implement the financial market acts, FINMA may itself carry out direct audits abroad or have such audits carried out by agents (Art. 43 para. 1 FINMASA). The admissibility and the requirements for conducting such audits shall be governed by the respective applicable foreign law. Audit firms or appointed agents must inform FINMA of planned audits abroad sufficiently in advance (usually 4-6 weeks) so that FINMA can obtain the necessary permission from the foreign financial market supervisory authority in advance.