The Swiss banking sector is the key factor in the economy, as it has an international reputation when it comes to the diversity of services offered, competence and sophistication. Swiss banks are typically engaged in various types of activities, in relation with both the private and commercial domain. Switzerland is considered to be the world leader in private banking.
The role of the Swiss central bank is held by the Swiss National Bank (SNB), with Union Bank of Switzerland and Credit Suisse being the two major banks in the country.
The Swiss regulatory system
Switzerland is not a member state of the European Union, or of the European Economic Area, therefore it is not bound by the European Legislation. Switzerland has the autonomy to regulate its own financial services industry.
Legal forms of banking regulation in Switzerland
Banking regulation can be expressed in various legal forms. The fundamental principles in Switzerland are included in the federal legislation, while concrete details are set out by governement ordinances. Federal legislation documents include:
- The Banking Act;
- The Stock Exchange Act;
- The Financial Market Supervision Act.
In addition to these regulations, there are other ordinances and circulares issued by the Swiss Financial Market Supervisory Authority (FINMA), as well as self – directory guidelines, directives and recommendations issued by the Swiss financial sector. However, the Swiss Bankers Association issues all these only under the supervision of FINMA.
Swiss Financial Market Supervisory Authority
FINMA is the main organization responsible for the regulation of banks and financial markets. FINMA works as an independent federal regulatory authority. Using a dualistic supervisory system, FINMA monitors and inspects the audit companies execute and the special inspections commissioned by the authority.
SIX Swiss Exchange
Certain aspects regarding securities brokering, such as the organization of trading, are subject to self – regulation through the SIX Swiss Exchanges and under the overall supervision of FINMA through the Swiss Banking Association. The SIX Swiss Exchange also ensures compliance with the regulatory framework for securities insurance and trading, monitoring and enforcing compliance with these regulations.
Supervision of security dealers
FINMA’s supervisory activities draw heavily on the work of audit firms that are delegated to conduct regular audits in certain sectors of institutions and by doing this, it provides direct supervision. The Supervision of Wealth Management Banks and Securities Dealers and the Supervision of Retail, Commercial and Trading Banks departments are responsible for monitoring security dealers, banks and other mortgage bond institutions.
Institutions that form and economic unit with other legal entities in the financial sector are also monitored on a constant basis as part of the supervision of financial services groups.
Corporate bank accounts
A company is able to open a Swiss bank account, regardless if it has a registered office located in Switzerland or not.
Companies that conduct commercial, services and manufacturing activities are listed in the Swiss Commercial Register, which means they must provide the bank with a relevant extract from the register.
Companies that are not listed in the Swiss Commercial Register or that don’t have a registered office in Switzerland must provide the bank with and extract from the Register of commerce or other equivalent documents, in order to allow the bank to identify the company, to confirm its existence and to determine its legal representatives. The same requirements apply to Swiss companies that don’t operate an official Register of commerce. In both cases, the documentation should not be older than 12 months.
Domiciliary companies are both Swiss and foreign companies that don’t conduct any operational activity and don’t have physical premises or personnel in Switzerland. In addition, these companies must declare the identity of the beneficial owners of their assets by submitting a special form (form A).