Advice in the Supervisory Procedure

Enforcement encompasses all investigations, proceedings and measures by which FINMA clarifies and sanctions violations of supervisory law. The enforcement proceeding is a formal administrative proceeding governed by the Administrative Procedure Act (APA) pursuant to Art. 53 FINMASA; it concludes with an appealable ruling or discontinuation. It may be directed against licensed institutions, unlicensed market participants, as well as against governing bodies, employees and, where applicable, qualified owners. At stake are the license, reputation and professional future of the responsible individuals, up to and including the continuation of business operations as a whole.

The risk increases in particular in the case of serious or repeated violations, deficiencies that are not remedied despite being requested to do so, doubts about the guarantee of irreproachable business conduct, and activities carried out without the required license. The requirements for the guarantee of irreproachable business conduct, for instance, vary by institution and arise from different supervisory laws. Triggers are frequently findings by the audit firm or supervisory organization, reports from customers or third parties, and media coverage.

An independent outside assessment helps identify risks early and address them in a targeted manner before a proceeding arises. velaw shows you where your institution stands and where action is needed. Contact us for a confidential initial consultation.

First, FINMA clarifies the suspicion informally, for instance through requests for information; supervised institutions are already obliged to provide information at this stage (Art. 29 FINMASA). If there are indications of violations of supervisory law provisions and FINMA opens a formal proceeding, it notifies the parties (Art. 30 FINMASA) and informs them of the alleged legal violations. From that point on, the parties are entitled in particular to access the files (Art. 26 APA) and to be heard (Art. 29 APA); at the same time, they are obliged to cooperate in establishing the facts (Art. 13 APA in conjunction with Art. 29 FINMASA). FINMA frequently appoints an investigating agent (see Question 4). The proceeding concludes with an appealable ruling or discontinuation of the proceeding.

From the opening of the proceeding at the latest, experienced guidance is advisable to help steer statements, deadlines and cooperation with any investigating agent strategically from the outset.

An investigating agent is an independent and qualified person appointed by FINMA to clarify facts relevant to supervisory law at a supervised entity or to implement ordered supervisory measures (Art. 36 para. 1 FINMASA). In practice, these are usually specialized audit or consulting firms. FINMA defines the agent’s tasks and determines to what extent they may act in place of the institution’s governing bodies (Art. 36 para. 2 FINMASA). The institution must grant the agent access to its premises and all information and documents required for the mandate (Art. 36 para. 3 FINMASA), and bears the costs, including, on FINMA’s order, an advance payment (Art. 36 para. 4 FINMASA). The investigating agent is one of FINMA’s most frequently used instruments.

Proceed in a structured manner: comply precisely with deadlines, designate a responsible contact person, involve the board of directors at an early stage, fully secure all relevant documents, and carefully review the facts internally. Supervised entities are obliged to provide information to FINMA (Art. 29 FINMASA); complete, accurate and consistent responses strengthen one’s own position.

This duty to cooperate does, however, have a limit: no one is required to incriminate themselves. In 2025, the Federal Supreme Court ruled that documents prepared and submitted specifically for FINMA on the basis of the duty to cooperate cannot be used in subsequent criminal proceedings if FINMA failed to inform those concerned of their right not to incriminate themselves (Judgment 7B_45/2022 of July 21, 2025). This applies to both natural and legal persons.

Equally decisive is consistent communication with employees, customers, investors and the public, aligned with the legal strategy.

Yes, under certain circumstances. For supervised entities, reporting is often mandatory anyway: incidents of material significance to supervision must be reported to FINMA without delay (Art. 29 para. 2 FINMASA); asset managers and trustees report them to their supervisory organization (Art. 43l para. 2 FINMASA). These may include, among other things, serious compliance violations, significant losses, major legal proceedings or severe cyberattacks (FINMA Supervisory Notice 05/2020). The law does not define the term; what matters is whether an incident is relevant to supervision. A proactive and transparent approach can also strengthen credibility with the supervisory authority.

There is, however, no guarantee: financial market supervisory law does not provide for self-reporting that secures immunity from prosecution or exemption from supervisory measures. Whether, when and in what form to report must therefore be carefully weighed, also with a view to potential criminal law risks (see Question 5).

It is precisely in this situation that early, confidential advice pays off. velaw helps you assess the facts and determine the right course of action.

In the case of any violation, the proper state of affairs must be restored. Further-reaching measures generally only come into consideration for serious violations; exceptions are the withdrawal of a license when its conditions are no longer met, and measures against activities carried out without a license. What qualifies as serious is assessed on a case-by-case basis, for instance based on the significance of the duty violated and the duration and scope of the violation.

In the case of any violation:

• Restoration of the proper state of affairs, for instance through organizational requirements, restrictions on business activities, or personnel changes within governing bodies (Art. 31 FINMASA)

Additionally, in the case of serious violations:

• Declaratory ruling: FINMA formally establishes the violation without further legal consequences. This is the mildest measure and is typically used when the institution has already remedied the deficiency itself (Art. 32 FINMASA)
• Confiscation of profits made or losses avoided as a result of the violation (Art. 35 FINMASA)
• Industry ban for executives of up to five years (Art. 33 FINMASA)
• Activity ban for traders and client advisors (Art. 33a FINMASA)
• Publication of the final ruling with disclosure of names (Art. 34 FINMASA)

Further measures:

• Withdrawal of the license if its conditions are no longer met or in the case of serious violations; this may lead to liquidation of the company (Art. 37 FINMASA)
• In the case of activity without a license: prohibition of the activity and, as with license withdrawal, up to and including liquidation of the company (Art. 37 para. 3 FINMASA)

FINMA does not impose fines. Criminal proceedings are conducted by the Federal Department of Finance (Art. 50 FINMASA), and by the Office of the Attorney General of Switzerland in cases of insider trading and market manipulation (Art. 154 et seq. FinMIA).

It is generally not required. However, those affected may be represented at any stage of the proceeding (Art. 11 APA). Legal representation that is familiar with FINMA’s practice and brings together the facts, strategy and communication from the outset is advisable, as a FINMA proceeding follows its own procedures and can have far-reaching consequences.

velaw combines financial market law, supervisory practice, and the institution’s perspective. Our team has personally held responsibility for legal, compliance, and risk functions in financial institutions and has supported numerous proceedings. We represent your interests from the initial contact with FINMA through to the conclusion of the proceedings.

The duration varies greatly and, based on experience, can drag on for several months. The decisive factor is primarily how serious FINMA considers the violations to be. The scope and complexity of the facts, the number of parties involved, and how quickly the necessary information is available also play a role. If FINMA appoints an investigating agent, the proceedings may be extended because the agent must first clarify the facts. If the ruling is appealed, the duration of the court proceedings is added to the total.

Yes. The appeal of FINMA rulings is governed by the provisions on federal administrative justice (Art. 54 FINMAG); the Federal Administrative Court has jurisdiction (Art. 31 and 33 lit. e VGG). The appeal period is 30 days, or 10 days for independently appealable interim rulings (Art. 50 VwVG). The decision of the Federal Administrative Court can be appealed to the Federal Supreme Court within 30 days (Art. 100 BGG). An appeal to the Federal Administrative Court generally has a suspensive effect, although FINMA can withdraw this (Art. 55 VwVG). Whether a further appeal is worthwhile is a matter of weighing the options: How should the chances of success be assessed, what duration and reputational consequences are to be expected, and what costs does this justify from today’s perspective? velaw supports you in this decision with a well-founded, independent assessment.

The level of costs depends primarily on the scope and complexity of the facts, the duration of the proceedings, and the number of parties involved, and can hardly be reliably quantified in advance. In principle, the company concerned bears all costs itself, in particular for its own legal representation, for any FINMA procedural costs (FINMA Fees and Levies Ordinance), for the investigating agent if FINMA appoints one (Art. 36 para. 4 FINMAG), and for the implementation of ordered measures.