Supervisory system in Switzerland

Self-Regulation in the Financial Sector

The supervisory system in Switzerland for the financial sector is based on a distinctive model of state-supervised self-regulation. This system ensures that financial intermediaries and advisers subject to the Anti-Money Laundering Act comply with their legal obligations to combat money laundering and terrorist financing, while also being supervised by specialised organisations.

What Does State-Supervised Self-Regulation Mean?

In the so-called para-banking sector, Switzerland applies a system of state-supervised self-regulation. This concept is established in the Federal Act on Combating Money Laundering and Terrorist Financing (AMLA). The Act requires financial intermediaries and advisers subject to AMLA to implement measures to prevent money laundering and terrorist financing.

Rather than relying exclusively on government supervision, the law allows financial intermediaries to establish self-regulatory organisations (SROs). These organisations perform important supervisory duties and ensure compliance with the applicable legal requirements.

The Para-Banking Sector in Switzerland

The so-called other financial sector, also known as the para-banking sector, includes financial intermediaries that are not banks but provide financial services. These include, for example:

• Fiduciaries
• Asset managers
• Payment service providers
• Financial advisers
• Other financial intermediaries and advisors

These companies must comply with the requirements of the Anti-Money Laundering Act and affiliate with a self-regulatory organisation.

Role of Self-Regulatory Organisations

Self-regulatory organisations define in greater detail how their members must implement the requirements of the Anti-Money Laundering Act (AMLA). They perform several important duties:

• Establishing rules for the implementation of legal obligations
• Monitoring their members’ compliance with these rules
• Conducting inspections and audits
• Imposing measures or sanctions in the event of violations

This results in a system that combines government regulation with industry-specific supervision.

Supervision by VQF

As a self-regulatory organisation, VQF performs important supervisory functions in relation to its members. These functions are based on the legal requirements of the Anti-Money Laundering Act.

Its responsibilities include in particular:

• Supervising members in the area of anti-money laundering
• Ensuring compliance with legal requirements
• Enforcing measures in the event of rule violations
• Supporting members in implementing their compliance obligations

What Makes the Swiss Supervisory System Distinctive

Switzerland’s supervisory system combines government regulation with industry-specific self-regulation. This model is regarded internationally as efficient because it draws on industry expertise while providing a clear legal framework.

State-supervised self-regulation enables a flexible and practical implementation of the regulations designed to combat money laundering and terrorist financing in the financial sector.