Principles-based regulation combined with sound judgement

FINMA is committed to principles-based and internationally compatible regulation, which allows the authority to perform its supervisory tasks in the right place at the right time and using the right tools.

FINMA sees itself primarily as an independent supervisory body that supervises financial market participants’ compliance with financial market legislation. Regulatory guidelines are set out by the Federal Parliament and Federal Council, who enact superordinated laws and ordinances. Overall responsibility for regulatory projects in relation to laws and Federal Council ordinances for the financial market lies with the Federal Department of Finance.

Regulatory channels

FINMA only issues regulations when necessary to achieve its supervisory objectives. Where authorised to do so, FINMA may enact its own ordinances to spell out technical details more clearly and issue corresponding implementing provisions. FINMA uses circulars to set out its own supervisory practices and describe how it interprets applicable laws and ordinances. FINMA can also recognise self-regulatory measures as a minimum standard.

Principles of regulation

In accordance with Article 7 FINMASA, when enacting regulations FINMA takes particular account of

  • the costs arising for supervised institutions as a result of a regulation being enacted;

  • the effects of regulation on competition, innovation capability and international competitiveness of Switzerland’s financial centre;

  • the different business activities and risks of supervised institutions;

  • and international minimum standards.

FINMA ensures that the regulatory process is transparent and that the parties affected are appropriately involved, as set out in its Guidelines on Regulation

FINMA’s role in regulation

What FINMA does

  • FINMA provides its expertise to assist in preparing draft versions of laws and Federal Council ordinances.

  • FINMA provides support to the parliamentary process, contributing the supervisory perspective and objectively pointing out the effects of regulatory projects.

  • FINMA may enact its own ordinances, where it is authorised to do so.

  • FINMA may issue circulars setting out its own supervisory practices and clarifying them for all market participants.

  • FINMA is responsible for recognising self-regulatory measures taken by industry organisations.

What FINMA does not do

  • FINMA does not set the legislative framework for its own supervisory activities.

  • The enactment of legislation is the responsibility of Parliament, while the Federal Council is responsible for issuing ordinances.