Financial market legislation states that certain business activities can only be conducted with authorisation from FINMA. For example, an individual who accepts deposits from more than 20 people or advertises this form of activity must normally first be licensed as a bank by FINMA. Depending on the type of authorisation, FINMA then subjects them to intensive or limited supervision.
It is an unfortunate fact that there are companies and individuals in the marketplace providing financial services without the requisite authorisation. Many are not legitimate businesses, and it is quite common for them to entice investors into handing over capital, particularly through making deposits, with the promise of attractive returns. Many of their victims lose much or even all of their investments. Generally, such providers lack the know-how, organisation and infrastructure required by law. They often turn out to be pyramid schemes or fronts for criminal activity.
FINMA enforces financial market law by dealing with these unauthorised activities. It acts on information received and can conduct in-depth investigations. If these confirm initial suspicions, they can lead to enforcement proceedings and specific measures being taken.
However, investors themselves can reduce their risk of falling victim to unauthorised financial service providers by observing a few basic rules.