Federal Act of 15 June 2018 on Financial Institutions (Financial Institutions Act, FinIA)

At a glance

Full text

Official full text: Federal Act of 15 June 2018 on Financial Institutions (Financial Institutions Act, FinIA) (PDF, de)¹ · 311 KB · file checked 2026-09-24 · consolidated version of 2024-03-01

Official page: fedlex.admin.ch¹ · Official English translation: fedlex.data.admin.ch²

Summary

The Federal Act on Financial Institutions (FinIA, SR 954.1) establishes a unified Swiss regulatory architecture governing non-banking financial institutions. Enforced by the Swiss Financial Market Supervisory Authority (FINMA) alongside authorised supervisory organisations (AOs), FinIA applies to portfolio managers, trustees, managers of collective assets, fund management companies, and securities firms, as well as Swiss branches and representative offices of foreign institutions. FinIA establishes mandatory prior authorisation before commercial operations can begin. It creates five distinct institutional licence tiers organized in a cascading hierarchy, alongside foreign branch and representation permissions. Key obligations include maintaining minimum capital (CHF 100,000 for portfolio managers and trustees), adequate own funds, risk management, and professional liability insurance or collateral. Firms must ensure effective Swiss management, fit-and-proper leadership, and prior notification for qualified participations (10%, 20%, 33%, 50%). While FINMA issues all authorisations and enforces sanctions, ongoing prudential supervision of portfolio managers and trustees is delegated to accredited supervisory organisations under FINMASA.

Summary written by the Atlas from the official text; the law itself prevails.

Main articles

• Art. 2: Defines financial institutions subject to the Act and lists exclusions including intra-family managers, lawyers, public institutions, and statutory banks.
• Art. 5: Mandates prior FINMA authorisation before financial institutions begin commercial activity and bars commercial register entry before authorisation is granted.
• Art. 6: Establishes an authorisation cascade whereby higher-tier licences (banks, securities firms, fund managers) encompass lower-tier permissions including portfolio management.
• Art. 7: Prescribes authorisation conditions, obliging portfolio managers and trustees to demonstrate supervision by an accredited supervisory organisation under FINMASA.
• Art. 8: Requires notification of changes to underlying authorisation facts and mandates prior supervisory approval for changes of material significance.
• Art. 10: Requires that financial institutions are effectively managed from Switzerland by persons residing where they can exercise management.
• Art. 11: Imposes fit-and-proper standards on managers and qualified participants, mandating prior FINMA notification for transfers crossing 10%, 20%, 33%, or 50% thresholds.
• Art. 14: Allows delegation of tasks solely to qualified third parties under supervision, conditioning foreign delegation of investment decisions on regulatory cooperation.
• Art. 17: Defines portfolio managers managing assets commercially in clients' names and trustees managing separate funds under the Hague Trust Convention.
• Art. 20: Requires management bodies of portfolio managers and trustees to include at least two qualified persons, permitting one only if continuity is proven.
• Art. 22: Mandates minimum capital of CHF 100,000 paid up in cash for portfolio managers and trustees, alongside collateral or professional liability insurance.
• Art. 23: Requires portfolio managers and trustees to hold own funds of at least one quarter of annual fixed costs up to CHF 10 million.
• Art. 24: Defines managers of collective assets and sets de minimis asset thresholds below which managers qualify as portfolio managers.
• Art. 32 & 33: Defines fund management companies, requiring Swiss incorporation as a company limited by shares and organizational independence from the custodian bank.
• Art. 41: Defines securities firms commercially trading securities for clients or own account, operating market-making activities, or offering securities on primary markets.
• Art. 52 & 58: Requires prior FINMA authorisation before foreign financial institutions may establish operational branches or representative offices within Switzerland.
• Art. 61: Designates FINMA as the competent licensing and enforcement authority while day-to-day supervision of portfolio managers and trustees belongs to supervisory organisations.
• Art. 61a: Lets FINMA and the supervisory organisations exchange any information and documents they need for their tasks (inserted by the Transparency of Legal Entities Act, AS 2026 323, in force 1 October 2026).
• Art. 69: Imposes criminal liability of up to three years' imprisonment or financial penalties for wilful violations of professional confidentiality, fining negligence.

Licences it governs

• TCSP · Switzerland

  Trustee licence

  FINMA

Regulators that apply it

• Switzerland

  Swiss Financial Market Supervisory Authority (FINMA)

  FINMA is Switzerland's independent financial markets authority, established under the Financial Market Supervision Act (FINMASA) to protect