text: 956.1English is not an official language of the Swiss Confederation. This translation is provided for information purposes only and has no legal force.Federal Acton the Swiss Financial Market Supervisory Authority(Financial Market Supervision Act, FINMASA)of 22 June 2007 (Status as of 1 January 2022) 2021 656The Federal Assembly of the Swiss Confederation,based on Articles 95 and 98 of the Federal Constitution1,and having considered the Federal Council Dispatch dated 1 February 20062,decrees:1 SR 1012 BBl 2006 2829Title 1 General Provisions3 3 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 1 Subject matter  1 The Confederation shall create an authority for the supervision of the financial markets in accordance with the following acts (the financial market acts):a. Mortgage Bond Act of 25 June 19304;b. Federal Act on Contracts of Insurance of 2 April 19085;c. Collective Investment Schemes Act of 23 June 20066;d. Banking Act of 8 November 19347;e.8 Financial Institutions Act of 15 June 20189;f. Anti-Money Laundering Act of 10 October 199710;g. Insurance Supervision Act of 17 December 200411;h.12 Financial Market Infrastructure Act of 19 June 201513;i.14 Financial Services Act of 15 June 201815.2 This Act establishes the organisation and the supervisory instruments of this authority.4 SR 211.423.45 SR 221.229.16 SR 951.317 SR 952.08 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).9 SR 954.110 SR 955.011 SR 961.0112 Inserted by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).13 SR 958.114 Inserted by Annex No 4 of the Financial Services Act of 15 June 2018, in force since  1 Jan. 2020 (AS 2019 4417; BBl 2015 8901).15 SR 950.1Art. 2 Relationship with the financial market acts  1 This Act applies unless the financial market acts provide otherwise.2 International treaties concluded within the context of international withholding tax and their associated international agreements, specifically in relation to transnational audits and market access, take precedence over this Act and financial market legislation.1616 Inserted by Art. 46 of the FA of 15 June 2012 on International Withholding Tax, in force since 20 Dec. 2012 (AS 2013 27; BBl 2012 4943).Art. 3 Supervised persons and entities  The following are subject to financial market supervision:a. persons and entities that under the financial market acts require to be licensed recognised, or registered by the Financial Market Supervisory Authority; andb. collective capital investments;c.17 ...17 Repealed by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), with effect from 1 Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 418 Objectives of financial market supervision  In accordance with the financial market acts, financial market supervision has the objectives of protecting creditors, investors, and insured persons as well as ensuring the proper functioning of the financial market. It thus contributes to sustaining the reputation, competitiveness and sustainability of Switzerland’s financial centre.18 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2019 (AS 2018 5247; BBl 2015 8901).Title 2 Financial Market Supervisory Authority19 19 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Chapter 1 General Provisions20 20 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 521 Legal form, seat and name  1 The authority that supervises the financial market is a public law institution with its own legal personality and official seat in Bern.2 Its name is the «Swiss Financial Market Supervisory Authority (FINMA)».3 It organises itself according to the principles of good corporate governance and economic management. It keeps its own accounts.21 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2019 (AS 2018 5247; BBl 2015 8901).Art. 6 Tasks  1 FINMA carries out its supervision according to the financial market acts and this Act.2 It fulfils the international tasks that are related to its supervisory activity.Art. 7 Principles of regulation  1 FINMA exercises its regulatory powers by issuing: a. ordinances, where so provided in the financial market legislation; andb. circulars on the application of the financial market legislation.2 It issues ordinances and circulars only to the extent required for the purposes of supervision, limiting itself as far as possible to the definition of principles. In doing so, it takes account of overriding federal law and in particular of:22a. the costs that the supervised persons and entities incur due to regulation; b. the effect that regulation has on competition, innovative ability and the international competitiveness of Switzerland’s financial centre;c.23 the different sizes, complexities, structures, business activities and risks of the supervised persons and entities; andd. the international minimum standards.3 It supports self-regulation and may recognise and implement the same as a minimum standard within terms of its supervisory powers.4 It provides for a transparent regulatory process and the appropriate participation of the parties concerned.5 It issues guidelines on the implementation of these principles. In doing so, it acts in agreement with the Federal Department of Finance (FDF)24.22 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).23 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).24 Name in accordance with Annex No 4 of the Financial Services Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2019 4417; BBl 2015 8901). This amendment has been made throughout the text.Chapter 2 Organisation  Section 1 Management Bodies and Staff  Art. 8 Management bodies  The management bodies of FINMA are:a. the Board of Directors;b. the Management Board;c. the Auditor.Art. 9 Board of Directors   1 The Board of Directors is the strategic management body of FINMA. It has the following tasks:a. It determines the strategic objectives of FINMA and submits them to the Federal Council for approval.b. It decides on matters of substantial importance.c. It issues the ordinances delegated to FINMA and decides on the circulars.d. It supervises the Management Board.e. It establishes an internal audit unit and provides for internal controls.f. It draws up the annual report and submits it to the Federal Council for approval prior to publication.g. It appoints the Chief Executive Officer, subject to approval by the Federal Council.h. It appoints the members of the Management Board.i. It issues the organisational regulations and the guidelines on information activities.j. It approves the budget.2 It comprises seven to nine expert members, who are independent of the supervised persons and entities. The Board of Directors is appointed for a term of office of four years; each member may be reappointed twice.3 The Federal Council appoints the Board of Directors. In doing so, it must ensure the appropriate representation of both genders. It appoints the Chair and the Vice-Chair. It determines the level of remuneration. Article 6a of the Federal Personnel Act of 24 March 200025 applies by analogy.4 The Chair may not carry out any other economic activity nor hold any federal or cantonal office unless this is in the interest of the fulfilment of the tasks of FINMA.5 The Federal Council removes members of the Board of Directors and approves the decision of the Board of Directors to terminate the employment of the Chief Executive Officer if the requirements for holding office are no longer fulfilled.25 SR 172.220.1Art. 10 Management Board  1 The Management Board is the operational management body. It is headed by a Chief Executive Officer.2 It has the following tasks in particular:a. It issues rulings in accordance with the organisational regulations.b. It prepares the files and materials on which the Board of Directors bases its decisions and reports to it regularly, and in the case of special events immediately.c. It carries out all the tasks that are not assigned to another management body.3 The organisational regulations regulate the details.Art. 11 Supervision areas  1 FINMA is divided into supervision areas. The organisational regulations regulate the details.2 The Federal Council and the Board of Directors ensure the appropriate representation of the various supervision areas on the Board of Directors and the Management Board.Art. 12 Auditor  The Federal Audit Office is the external auditor and provides the Board of Directors and the Federal Council with a report on the result of its audit.Art. 1326 Staff  1 The employment of FINMA staff is governed by public law.2 Article 6a of the Federal Personnel Act of 24 March 200027 applies by analogy.3 The occupational pension scheme for the staff is governed by the legislation on the Federal Pension Fund. 4 The Board of Directors regulates in an ordinance:a. the employment of personnel and in particular salaries, additional benefits, working hours, duty of loyalty and termination of employment;b. the composition, election and organisation of the Joint Committee for the FINMA Pension Fund.5 The Board of Directors shall submit the ordinance to the Federal Council for approval.Art. 13a28 Data processing1 FINMA shall process, in hard copy or in one or more information systems, the data on its employees necessary for performing the tasks in accordance with this Act, particularly for:a. creating, executing and terminating an employment relationship;b. personnel and wage management;c. personnel development;d.  performance appraisal; e. reintegration measures in the event of illness and accident.2 It may process the following data pertaining to its employees necessary for performing the tasks set out in paragraph 1, including sensitive personal data and personality profiles:a. personal details;b. state of health details with regard to working ability;c. performance and potential information, as well as data on personal and professional development;d. data required within the framework of participation in the implementation of social security law;e. case files and authorities' decisions associated with work.3 It shall issue implementing regulations with regard to:a. the architecture, organisation and operation of the information system(s);b. the processing of data, particularly gathering, storage, archiving and destruction;c. data processing authorisations;d. the data categories under paragraph 2;e. data protection and security.26 Amended by Annex No 4 of the FA of 14 Dec. 2012, in force since 1 July 2013  (AS 2013 1493; BBl 2011 6703).27 SR 172.220.128 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 14 Official secrecy  1 The staff and the management bodies must observe secrecy on official matters.2 The duty of secrecy continues to apply after termination of employment or membership of a management body of FINMA.3 The staff and the individual members of the management bodies of FINMA may not without authorisation from FINMA disclose in evidentiary hearings and in court proceedings as parties, witnesses or expert witnesses matters that have come to their knowledge in the course of their duties and that relate to their official tasks.4 Official secrecy applies to all FINMA agents (audit agents, investigating agents, restructuring agents, liquidators, administrators in bankruptcy).2929 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Section 2 Funding and Financial Budget  Art. 15 Funding  1 FINMA levies fees for supervisory proceedings in individual cases and for services. In addition, it levies an annual supervision charge on the supervised persons and entities for each supervision area to cover the costs incurred by FINMA that are not covered by the fees.2 The supervision charge is assessed according to the following criteria:a.30 ...abis.31 For supervised persons and entities under Article 1a of the Banking Act of 8 November 193432, Article 2 paragraph 1 letter e of the Financial Institutions Act of 15 June 201833 and the Mortgage Bond Act of 25 June 193034, on the basis of the balance sheet total and securities turnover; for supervised persons and entities under Article 2 paragraph 1 letters c and d of the Financial Institutions Act on the basis of the amount of assets managed, the gross earnings and the size of the undertaking; for supervised persons and entities under Article 1b of the Banking Act, on the basis of the balance sheet total and the gross earnings.ater.35 For supervised persons and entities under the Financial Market Infrastructure Act of 19 June 201536, on the basis of the balance sheet total and securities turnover, or gross earnings if no securities are transacted.b. For supervised persons and entities under the Collective Investment Schemes Act of 23 June 200637, on the basis of the amount of assets managed, the gross earnings and the size of the undertaking.c. For insurance institutions under the Insurance Supervision Act of 17 December 200438, on the basis of their share of the total premium income for all insurance institutions; for insurance agents under Article 43 paragraph 1 of the Insurance Supervision Act of 17 December 2004, on the basis of their number and the size of the undertaking.d.39 For self-regulatory organisations under the Anti-Money Laundering Act of 10 October 199740 (AMLA), on the basis of the gross earnings and number of members;e.41 For a supervisory organisation in accordance with Title 3, the share accounted for by its supervised persons and entities with regard to the total number of supervised persons and entities of all supervisory organisations is decisive; the supervision fee also covers the costs that FINMA incurs that are caused by supervised persons and entities and which are not covered by other charges.3 The Federal Council may provide for the apportionment of the supervision fee into a fixed basic fee and a variable supplementary fee.4 It regulates the details, and in particular:a. the assessment principles;b. the supervision areas under paragraph 1; andc. the apportionment of the costs to be financed by the supervision charge among the supervision areas.30 Obsolete. See Art. 75 para. 5 of the Financial Institutions Act of 15 June 2018 (SR 954.1).31 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).32 SR 952.033 SR 954.134 SR 211.423.435 Originally: Let. abis. Inserted by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).36 SR 958.137 SR 951.3138 SR 961.0139 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).40 SR 955.041 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 16 Reserves  FINMA shall within a reasonable time form reserves for the exercise of its supervisory activity in an amount equivalent to one annual budget.Art. 17 Treasury  1 The Federal Finance Administration manages the liquid assets of FINMA as part of its central Treasury.2 It grants FINMA loans on market terms in order to guarantee its liquidity.3 The Federal Finance Administration and FINMA determines the details of their cooperation by mutual agreement.Art. 18 Accounting  1 The financial statements of FINMA disclose in full its assets and liabilities, earnings and costs. 2 They follow the general principles of materiality, intelligibility, consistency and gross presentation and comply with the generally recognised standards.3 The accounting and valuation rules derived from the accounting standards must be disclosed.Art. 19 Liability  1 The liability of FINMA, its management bodies, its staff and FINMA agents is governed by the Government Liability Act of 14 March 195842, subject to paragraph 2 below.432 FINMA and its agents are liable only if:a. they have committed a breach of fundamental duties; andb. loss or damage is not due to a breach of duty by a supervised person or entity.42 SR 170.3243 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 20 Tax exemption  1 FINMA is exempt from any taxation by the Confederation, the cantons or the communes.2 The federal legislation on:a. value added tax;b. withholding tax;c. stamp duties,is reserved.Section 3 Independence and Supervision  Art. 21 1 FINMA carries out its supervisory activity autonomously and independently.2 At least once each year, it reviews the strategy for its supervisory activity and current issues of financial centre policy with the Federal Council.3 It deals with the Federal Council via the FDF.4 The National Council and the Council of States are responsible for its superintendence.Section 4 Information for the General Public and Data Processing  Art. 22 Information for the general public  1 FINMA informs the general public at least once each year about its supervisory activity and supervisory practices.2 It does not provide information on individual proceedings, unless there is a particular need to do so from a supervisory point of view and in particular if the information is necessary:a. for the protection of market participants or the supervised persons and entities;b. to correct false or misleading information; orc. to safeguard the reputation of Switzerland’s financial centre.3 Where FINMA has provided information on individual proceedings, it must also provide immediate notice of the closure of the proceedings. This may be dispensed with at the request of the party concerned.4 FINMA takes account of the personality rights of those concerned in all its information activities. Personal data may be published in electronic or printed form.Art. 23 Data processing and public directory  1 As part of its supervisory activity under this Act and the financial market acts, FINMA processes personal data, including particularly sensitive personal data and personality profiles. It regulates the details.2 It maintains a directory of the supervised persons and entities. This directory is accessible to the public in electronic form.Chapter 3 Supervisory Instruments  Section 1 Audit  Art. 2444 Principle  1 In accordance with the financial market acts (Art. 1 para. 1), FINMA carries out the audit either itself or arranges for it to be carried out:a. by licensed audit companies appointed by the supervised persons and entities and der Federal Audit Oversight Authority under Article 9a des Auditor Oversight Act of 16 December 200545; orb. audit agents in accordance with Article 24a.2 The audit relates in particular to the risks that supervised persons and entities may pass on to creditors, investors, insured persons or to the proper function of the financial markets. Duplication of auditing work must be avoided as far as possible.3 Article 730b paragraph 2 of the Code of Obligations46 applies by analogy to the preservation of confidentiality by audit companies.4 In relation to audits under paragraph 1 letter a, the Federal Council regulates the main aspects of the content and conduct of the audit and the form of the report. It may authorise FINMA to issue implementing provisions on technical matters.5 The supervised persons and entities bear the costs of the audit.44 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).45 SR 221.30246 SR 220Art. 24a47 Audit agents  1 FINMA may instruct an independent and suitably qualified person to conduct audits of supervised persons and entities.2 It specifies the duties of the audit agent in the appointment order.3 The supervised persons and entities bear the agent’s costs.47 Inserted by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 2548 Duties of the audited supervised persons and entities  1 Where an audit company is appointed or if FINMA appoints an audit agent, the supervised persons and entities must provide them with all information and documents that are required to carry out their tasks.2 The supervised person or entity must notify FINMA of its choice of audit company.48 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 2649 49 Repealed by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), with effect from 1 Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 27 Reporting and measures  1 The audit company provides FINMA with a report on its audits. The audit company provides the supreme management body of the audited supervised person or entity with a copy of the report.50 2 If it identifies violations of supervisory provisions or other irregularities, it shall give the audited supervised person or entity an appropriate period to restore compliance with the law. If the period is not complied with, it informs FINMA.3 In the case of serious violations of supervisory provisions or serious irregularities, the audit company notifies FINMA immediately.50 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 28 Supervision of the audit companies  1 ...512 FINMA and the Federal Audit Oversight Authority provide each other with all the information and documents that each need to enforce the relevant legislation.5251 Repealed by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), with effect from 1 Jan. 2015 (AS 2014 4073; BBl 2013 6857).52 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 28a53 Appointment and change of the audit company  1 Two different audit companies must be instructed for the audit under the licensing procedure and the other audits.2 In justified cases, FINMA may require the supervised person or entity to change audit company.3 FINMA shall notify the Federal Audit Oversight Authority before ordering a change under paragraph 2.53 Inserted by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Section 2 Further Supervisory Instruments  Art. 29 Duty to provide information and to report  1 The supervised persons and entities, their audit companies and auditors as well as persons or companies that are qualified investors or that have a substantial participation in the supervised persons and entities must provide FINMA with all information and documents that it requires to carry out its tasks.2 The supervised persons and entities and the audit companies that conduct audits of them must also immediately report to FINMA any incident that is of substantial importance to the supervision.5454 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Art. 30 Notice of the opening of proceedings  Where there are indications of violations of supervisory provisions and if FINMA opens proceedings, it notifies the parties of this.Art. 31 Restoration of compliance with the law  1 Where a supervised person or entity violates the provisions of this Act or of a financial market act or if there are any other irregularities, FINMA shall ensure the restoration of compliance with the law.2 Where the rights of clients appear to be jeopardised, FINMA may require the supervised persons or entities to provide collateral.5555 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 32 Declaratory ruling and substitute performance56  1 Where the proceedings reveal that the supervised person or entity has seriously violated supervisory provisions, but there is no longer a need to order measures to restore compliance with the law, FINMA may issue a declaratory ruling.2 If an enforceable ruling from FINMA is not observed within the set deadline after a prior warning, FINMA may perform the required act itself or have it performed at the expense of the defaulting party.5756 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).57 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 33 Prohibition from practising a profession  1 If FINMA detects a serious violation of supervisory provisions, it may prohibit the person responsible from acting in a management capacity at any person or entity subject to its supervision.2 The prohibition from practising a profession may be imposed for a period of up to five years.Art. 33a58 Prohibition from performing an activity1 Where the following persons seriously violate the provisions of the financial market acts, the implementing provisions or in-house directives, FINMA may prohibit such persons from trading in financial instruments or acting as a client adviser for a fixed period, or permanently in the case of repeated offences:a. employees of a supervised entity responsible for trading in financial instruments;b. employees of a supervised entity acting as client advisers.2 If the prohibited activity also covers an activity in an area under the supervision of another supervisory authority, this authority is to be consulted and informed of the decision.58 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 34 Publication of the supervisory ruling  1 Where there is a serious violation of supervisory provisions, FINMA may publish in electronic or printed form its final ruling once it takes full legal effect, and disclose the relevant personal data.2 Notice of publication must be contained in the ruling itself.Art. 35 Confiscation  1 FINMA may confiscate any profit that a supervised person or entity or a responsible person in a management position has made through a serious violation of the supervisory provisions.2 The foregoing provision applies by analogy if a supervised person or entity or a responsible person in a management position has prevented a loss through a serious violation of supervisory provisions.3 Where the extent of the assets to be confiscated cannot be ascertained or requires a disproportionate effort to be ascertained, FINMA may make an estimate.4 The right to confiscate prescribes after seven years.5 Criminal law confiscation under Articles 70–72 of the Criminal Code59 takes precedence over confiscation under this provision.6 The confiscated assets go to the Confederation unless they are paid to the parties suffering loss.59 SR 311.0Art. 36 Investigating agents  1 FINMA may appoint an independent and suitably-qualified person to investigate circumstances relevant for supervisory purposes at a supervised person or entity or to implement supervisory measures that it has ordered (an investigating agent).2 It specifies the duties of the investigating agent in the appointment order. It determines the extent to which the investigating agent may act in the place of the management bodies of the supervised person or entity.3 The supervised person or entity must allow the investigating agent access to its premises and provide him or her with all the information and documents that the investigating agent requires to fulfil his or her duties.4 The costs of the investigating agent are borne by the supervised person or entity. It must if so instructed by FINMA make an advance payment to cover costs.Art. 37 Revocation of licence, withdrawal of recognition60  1 FINMA shall revoke the licence of a supervised person or entity, or withdraw its recognition if it no longer fulfils the requirements for its activity or seriously violates the supervisory provisions.612 On revocation, withdrawal or cancellation, the supervised person or entity loses its right to carry out its activity. The other consequences of revocation, withdrawal or cancellation are governed by the applicable financial market acts.3 These consequences apply by analogy if a supervised person or entity carries out its activity without a licence, recognition, or registration.60 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).61 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Section 3 Cooperation with Domestic Authorities  Art. 38 Prosecution authorities  1 FINMA and the competent prosecution authority shall exchange the information that they require in the context of their collaboration and in order to fulfil their tasks. They shall use the information received exclusively to fulfil their respective tasks.622 They coordinate their investigations, as far as is practicable and required.3 Where FINMA obtains knowledge of common law felonies and misdemeanours or of offences against this Act or the financial market acts, it shall notify the competent prosecution authorities.62 Amended by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 3963 Other domestic authorities  1 FINMA is authorised to provide other domestic supervisory authorities and the Swiss National Bank with non-public information that they need to fulfil their tasks.1bis FINMA and the supervisory authority under the Health Insurance Oversight Act of 26 September 201464 shall coordinate their supervisory activities. They shall inform each other as soon as they become aware of events that are of significance to the other supervisory authority.652 FINMA may also exchange non-public information on certain financial market participants with the FDF where this helps maintain the stability of the financial system.6663 Amended by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).64 SR 832.1265 Inserted by Annex No 4 of the Financial Services Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2019 4417; BBl 2015 8901).66 Amended by Annex No 4 of the Financial Services Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2019 4417; BBl 2015 8901).Art. 40 Grounds for refusal  FINMA may refuse to disclose information that is not publicly accessible or to hand over files to prosecution authorities and other domestic authorities where:a. the information and the files solely serve the purpose of forming internal opinions;b. their disclosure or handover would prejudice ongoing proceedings or the fulfilment of its supervisory activity;c. it is not compatible with the aims of financial market supervision or with its purpose.Art. 41 Disputes  At the request of any of the authorities concerned, the Federal Administrative Court rules on disputes relating to the cooperation between FINMA on the one hand and prosecution authorities or other domestic authorities on the other.Art. 41a67 Communication of judgments1 The cantonal civil courts and the Federal Supreme Court shall provide FINMA free of charge with a full copy of their judgment in relation to disputes between a supervised person or entity and creditors, investors or insured parties.2 FINMA shall forward to the supervisory organisation the judgments concerning the supervisory organisation's supervised persons and entities.67 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Section 4 Cooperation with Foreign Bodies68 68 Amended by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483). Art. 4269 Administrative assistance  1 In order to implement the financial market acts, FINMA may ask foreign financial market supervisory authorities to provide information.2 It may transmit non-public information to foreign financial market supervisory authorities only if:a. this information is used exclusively to implement financial market law, or is forwarded to other authorities, courts or bodies for this purpose;b. the requesting authorities are bound by official or professional secrecy, notwithstanding provisions on the public nature of proceedings and the notification of the general public about such proceedings.3 Paragraphs 1 and 2 apply by analogy to the exchange of information between FINMA and foreign authorities, courts and bodies involved in the restructuring and resolution of authorised parties.4 The administrative assistance shall be carried out swiftly. FINMA shall observe the principle of proportionality. The transmission of information concerning persons who are manifestly uninvolved in the matter being investigated is not permitted.5 FINMA may, in agreement with the Federal Office of Justice, authorise the forwarding of information to prosecution authorities for purposes other than those mentioned in paragraph 2 letter a, provided that mutual legal assistance in criminal matters is not excluded.69 Amended by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 42a70 Administrative assistance proceedings   1 If FINMA does not yet have the information to be transmitted, it may request it from the information holders. The persons called on to provide information may refuse to answer questions by virtue of Article 16 of the Administrative Procedure Act of 20 December 196871.2 Subject to paragraphs 3 to 6, the Administrative Procedure Act applies to information regarding individual clients which is to be transmitted by FINMA.3 FINMA may refuse the right of access to the correspondence with foreign authorities. Article 28 of the Administrative Procedure Act remains reserved.4 FINMA may exceptionally refrain from informing the clients concerned before transmitting the information if the purpose of the administrative assistance and the effective fulfilment of the requesting authority's tasks would be compromised by prior notification. In such cases, the clients concerned shall be informed afterwards.5 In the cases detailed in paragraph 4, FINMA shall inform the information holders and the authorities notified of the request about the postponement of notification. These may not provide information about the request until the clients in question have been informed.6 The decision of FINMA on the transmission of information to the foreign financial market supervisory authority may be challenged by the client before the Federal Administrative Court within ten days. Article 22a of the Administrative Procedure Act does not apply. In the cases detailed in paragraph 4, the request may only cite a declaration of unlawfulness.70 Inserted by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).71 SR 172.021Art. 42b72 Cooperation with international organisations and bodies  1 In order to fulfil its tasks in accordance with Article 6, FINMA may participate in multilateral initiatives of international organisations and bodies which give rise to the exchange of information.2 In the case of multilateral initiatives which have far-reaching implications for the Swiss financial centre, participation in the exchange of information shall take place in agreement with the FDF.3 When participating, FINMA may transmit non-public information to international organisations and bodies only if:a. this information is used exclusively to fulfil tasks associated with the development of and compliance with regulatory standards or to analyse systemic risks;b. confidentiality is ensured.4 FINMA shall agree the precise intended use and any forwarding of the information transmitted with the international organisations and bodies. Paragraph 3 remains reserved.72 Inserted by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 42c73 Transmission of information by supervised parties   1 Supervised parties may transmit non-public information to the foreign financial market supervisory authorities responsible for them and to other foreign entities responsible for supervision provided:a. the conditions set out in Article 42 paragraph 2 are fulfilled;b. the rights of clients and third parties are preserved.2 Furthermore, they may transmit non-public information related to the transactions of clients and supervised parties to foreign authorities and to entities acting on the authorities' behalf if the rights of clients and third parties are preserved.3 The transmission of information that is of substantial importance in accordance with Article 29 paragraph 2 must be reported to FINMA beforehand. 4 FINMA may reserve administrative assistance channels. 5 It may make the transmission, publication or forwarding of files in the context of supervision subject to its approval if this is in the interest of its task fulfilment and is not in conflict with overriding private or public interests.73 Inserted by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 43 Cross-border audits  1 In order to implement the financial market acts, FINMA may itself carry out direct audits of supervised persons and entities abroad or have such audits carried out by audit agents.742 It may permit foreign financial market supervisory authorities to carry out direct audits of supervised parties provided:a. these authorities are responsible for the supervision of the audited supervised party as part of home country supervision or are responsible for supervising the activity of the audited supervised party in their territory; andb. the conditions for administrative assistance set out in Article 42 paragraph 2 are fulfilled.753 Information may be collected through cross-border direct audits only if it is required for the supervisory activity of the foreign financial market supervisory authority. This includes in particular information on whether an institution throughout its group structure:a. is appropriately organised;b. records, limits and monitors in an appropriate manner the risks inherent in its business operations;c. is managed by persons who guarantee proper business conduct;d. fulfils the own funds and risk diversification regulations on a consolidated basis; ande. properly complies with its reporting duties vis-à-vis the supervisory authorities.763bis If during direct audits in Switzerland foreign financial market supervisory authorities wish to consult information linked directly or indirectly to the asset management, securities trading or deposit business for individual clients, FINMA shall collect this information itself and transmit it to the requesting authorities. The same applies to information which directly or indirectly relates to individual investors in collective investment schemes. Article 42a applies.77 3ter FINMA may, for the purposes detailed in paragraph 3, allow the foreign financial market supervisory authority which is responsible for the consolidated supervision of the audited supervised party to consult a limited number of individual client dossiers. The dossiers must be selected randomly on the basis of predefined criteria.784 FINMA may accompany the foreign authorities responsible for financial market supervision on their direct audits in Switzerland or arrange for them to be accompanied by an audit company or an audit agent. The supervised persons and entities concerned may request such accompaniment.795 Establishments organised under Swiss law must provide the foreign financial market supervisory authorities and FINMA with the information required to carry out the direct audits or the information that FINMA requires to provide the administrative assistance, and must permit the inspection of their books.6 Establishments are defined as:a. subsidiaries, branch offices and representative offices of supervised persons and entities or of foreign institutions; andb. other companies, provided their activity is included by a financial market supervisory authority in the consolidated supervision.74 Amended by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).75 Amended by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).76 Amended by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).77 Inserted by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).78 Inserted by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).79 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).Title 380 Supervision of Portfolio Managers and Trustees81 80 Inserted by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).81 Amended by Annex 1 No 4 of the FA of 19 March 2021, in force since 1 Jan. 2022  (AS 2021 656; BBl 2019 5451).Chapter 1 General Provisions  Art. 43a Supervisory organisation1 The ongoing supervision of portfolio managers and trustees under Article 16 of the Financial Institutions Act of 15 June 201882 is performed by one or more supervisory organisations with their registered office in Switzerland.83 2 The supervisory organisation shall require authorisation from FINMA before commencing its supervisory activity and shall be supervised by FINMA. 3 The supervisory organisation may also supervise financial intermediaries under Article 2 paragraph 3 of the Anti-Money Laundering Act of 10 October 199784 (AMLA) with regard to compliance with their duties under AMLA, provided they are recognised as a self-regulatory organisation in accordance with Article 24 AMLA.4 If the supervisory organisation is also active in accordance with paragraph 3 as a self-regulatory organisation, it shall ensure that this is evident to others at all times.Art. 43b Continuous supervision  1 The supervisory organisation shall continuously monitor whether portfolio managers and trustees in accordance with Article 17 of the Financial Institutions Act of 15 June 201885 are in compliance with the financial market legislation to which they are subject.862 Where the supervisory organisation detects violations of supervisory provisions or other irregularities, it shall give the audited supervised person or entity an appropriate period to restore compliance with the law. If the period is not complied with, it informs FINMA.3 The Federal Council shall determine the main aspects and content of the continuous supervision. In doing so, it shall take account of the differing size and business risks of the supervised person or entity. It may authorise FINMA to issue implementing provisions on technical matters.85 SR 954.186 Amended by Annex 1 No 4 of the FA of 19 March 2021, in force since 1 Jan. 2022  (AS 2021 656; BBl 2019 5451).82 SR 954.183 Amended by Annex 1 No 4 of the FA of 19 March 2021, in force since 1 Jan. 2022  (AS 2021 656; BBl 2019 5451).84 SR 955.0Chapter 2 Authorisation   Art. 43c Principle1 FINMA shall grant the supervisory organisation authorisation if the provisions of this chapter are complied with.2 It shall approve the supervisory organisation's articles of association and organisational regulations, as well as the appointment of the persons entrusted with its administration and management.3 Prior authorisation or approval from FINMA must be obtained in the case of changes to circumstances requiring authorisation and documents requiring approval.4 If two or more supervisory organisations are established, the Federal Council may issue rules for the coordination of their activities and the subjection of the supervised persons and entities to a given supervisory organisation. Art. 43d Organisation 1 The supervisory organisation must effectively be managed from Switzerland.2 It must have appropriate management rules and be organised in such a manner that it can fulfil its duties in accordance with this Act. 3 It must have the financial and personnel resources necessary to perform its tasks.4 It must have a management board as the operational body. Art. 43e Guarantee of irreproachable business conduct and independence1 The supervisory organisation and the persons responsible for its management must provide a guarantee of irreproachable business conduct.2 Moreover, the persons responsible for administration and management must enjoy a good reputation and have the specialist qualifications required for their functions.3 A majority of the persons charged with administration must be independent of the supervised persons and entities.4 The members of the management board must be independent of the persons and entities supervised by the supervisory organisation.5 The persons entrusted with supervision must be independent of the persons and entities they supervise. The tasks of a supervisory organisation under this Act and those of a self-regulatory organisation under AMLA87 may be managed by the same persons and carried out by the same staff.Art. 43f Funding and reserves1 The supervisory organisation shall finance its supervisory in individual cases and when providing services from contributions paid by the supervised persons and entities. 2 The supervisory organisation shall form reserves within a reasonable time for the exercise of its supervisory activity in an amount equivalent to one annual budget.3 The Confederation may grant the supervisory organisation a loan on market terms in order to guarantee its liquidity until the reserves in accordance with paragraph 2 have been formed in full.Art. 43g Liability   Article 19 applies by analogy to the supervisory organisation.87 SR 955.0Chapter 3 Supervision of the Supervisory Organisation  Art. 43h Principles1 The supervisory organisation shall periodically inform FINMA about its supervisory activity. 2 FINMA shall verify whether the supervisory organisation meets the requirements under Chapter 2 of this title and whether it is performing its supervisory tasks.3 The supervisory organisation must furnish FINMA with all the information and documents that FINMA requires to supervise the supervisory organisation.Art. 43i Measures1 FINMA shall take the necessary measures if the supervisory organisation does not meet the requirements under Chapter 2 of this title or does not perform its supervisory tasks. 2 FINMA may dismiss persons who no longer fulfil the guarantee of irreproachable business conduct.3 If no other measure proves effective, FINMA may liquidate the supervisory organisation and transfer the supervisory activity to another supervisory organisation as a measure of last resort. 4 If there are indications of irregularities and the supervisory organisation does not take the measures required to restore compliance with the law, FINMA may:a. conduct an audit of the supervised person or entity;b. appoint an audit agent in accordance with Article 24a; orc. make use of supervisory instruments in accordance with Articles 29–37.Chapter 4 Data Processing  Art. 43j Article 23 applies by analogy.Chapter 5  Supervisory Instruments of the Supervisory Organisation  Art. 43k  Auditing1 The supervisory organisation may carry out the audit of its supervised persons and entities itself or arrange for it to be carried out by an audit company that:a. is licensed as an auditor by the Federal Audit Oversight Authority in accordance with Article 6 of the Auditor Oversight Act of 16 December 200588;b. is adequately organised for this audit; andc. does not perform any other activity requiring authorisation under the financial market acts.2 For audits conducted by an audit company in accordance with paragraph 1, a lead auditor must be appointed who:a. is licensed by the Federal Audit Oversight Authority as an auditor in accordance with Article 5 of the Audit Oversight Act;b. possesses the required specialist knowledge and practical experience to conduct the audit in accordance with paragraph 1.3 Articles 24 paragraphs 2–5 and 24a–28a apply by analogy.4 If so ordered by the supervisory organisation, the supervised persons and entities must make an advance payment to cover costs.Art. 43l Duty to provide information and to report  1 The supervised persons and entities, their audit companies and auditors as well as persons or companies that are qualified investors or that have a substantial participation in the supervised persons and entities must provide FINMA with all information and documents that it requires to carry out its tasks.2 The supervised persons and entities and the audit companies that conduct audits of them must also immediately report to FINMA any incident that is of substantial importance to the supervision.88 SR 221.302Title 4 Criminal Provisions89 89 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 44 Activity without authorisation, recognition, a licence, registration or affiliation with a self-regulatory organisation90  1 Any person who wilfully without authorisation, recognition, a licence, registration or affiliation with a self-regulatory organisation in accordance with Article 24 paragraph 1 of the AMLA91 carries out an activity that requires authorisation, recognition, a licence, registration or affiliation with a self-regulatory organisation under the financial market acts is liable to a custodial sentence of up to three years or to a monetary penalty.922 Where the offender acts through negligence, he or she is liable to a fine of up to 250 000 francs.3 ...9390 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).91 SR 955.092 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).93 Repealed by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, with effect from 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 45 Provision of false information  1 Any person who wilfully provides FINMA, an audit company, a supervisory organisation a self-regulatory organisation, or an agent with false information is liable to a custodial sentence of up to three years or to a monetary penalty.942 Where the offender acts through negligence, he or she is liable to a fine of up to 250 000 francs.3 ...9594 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).95 Repealed by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, with effect from 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 46 Violations of obligations by agents96  1 Any person who as an agent wilfully and seriously violates the supervisory provisions by:97 a.98 falsely stating essential information in the report or withholding essential information;b. failing to make a mandatory report to FINMA; orc. failing to make an order under Article 27 to the audited supervised person or entity,is liable to a custodial sentence of up to three years or to a monetary penalty.2 Where the offender acts through negligence, he or she is liable to a fine of up to 250 000 francs.3 ...9996 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).97 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).98 Amended by Annex No 8 of the FA of 20 June 2014 (Consolidation of Oversight through Audit Companies), in force since 1. Jan. 2015 (AS 2014 4073; BBl 2013 6857).99 Repealed by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, with effect from 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 47 Audit of annual financial statements  1 Any person who wilfully:a.100 fails to have the annual financial statements required by the financial market acts audited by a licensed audit company or to have an audit carried out that has been ordered by FINMA or a supervisory organisation;b. fails to fulfil his or her obligations vis-à-vis the audit company or the agent,is liable to a custodial sentence of up to three years or to a monetary penalty.2 Where the offender acts through negligence, he or she is liable to a fine of up to 250 000 francs.3 ...101100 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).101 Repealed by Annex No 13 of the Financial Market Infrastructure Act of 19 June 2015, with effect from 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 48 Non-compliance with rulings102  Any person who wilfully fails to comply with a legally enforceable ruling issued by FINMA containing notice of the penalties under this Article or with a decision of the appeal courts is liable to a fine of up to 100 000 francs.102 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 49 Offences in business operations  The ascertainment of the criminally liable persons may be dispensed with and instead the business operation may be ordered to pay the fine (Art. 7 of the FA of 22 March 1974103 on Administrative Criminal Law) where:a. the ascertainment of the persons who are criminally liable under Article 6 of the Federal Act of 22 March 1974 on Administrative Criminal Law requires investigative measures that are disproportionate in comparison with the penalty incurred; andb. a fine of a maximum of 50 000 francs is under consideration for the violations of the criminal provisions of this Act or the financial market acts.103 SR 313.0Art. 50 Jurisdiction  1 For violations of the criminal provisions of this Act or the financial market acts, the Federal Act of 22 March 1974104 on Administrative Criminal Law applies, unless this Act or the financial market acts provides otherwise. The authority responsible for prosecution and judgement is the FDF.2 Where proceedings before the courts are requested or if the FDF is of the view that the requirements for a custodial sentence or a custodial measure are met, the offence is subject to federal jurisdiction. In such a case, the FDF shall refer the files to the Office of the Attorney General of Switzerland for proceedings before the Federal Criminal Court. The referral is deemed to be the bringing of charges Articles 73–83 of the Federal Act of 22 March 1974 on Administrative Criminal Law apply by analogy.3 The representatives of the Office of the Attorney General of Switzerland and of the FDF are not required to appear in person at the trial.104 SR 313.0Art. 51 Unification of prosecution  1 In a criminal case, if both the jurisdiction of the FDF and federal or cantonal jurisdiction apply, the FDF may order that the prosecution be unified under the prosecution authority already dealing with the case, provided there is a close factual relation, the case is not yet pending before the competent court and unification will not unreasonably delay the ongoing proceedings.2 The Appeals Chamber of the Federal Criminal Court decides on any disputes between the FDF and the Office of the Attorney General of Switzerland or the cantonal authorities.Art. 52 Statute of limitations  The prosecution of offences under this Act and under the financial market acts become time barred after seven years.Title 5 Procedure and Right of Appeal105 105 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 53 Administrative procedure  The procedure is governed by the provisions of the Federal Act of 20 December 1968106 on Administrative Procedure.106 SR 172.021Art. 54 Right of appeal  1 The contesting of FINMA rulings is governed by the provisions on the administration of federal justice.2 FINMA is entitled to appeal to the Federal Supreme Court.Title 6 Final Provisions107 107 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Chapter 1 Implementation108 108 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 55109 Implementing provisions  1 The Federal Council shall issue the implementing provisions. In doing so, it shall observe the principles of regulation in Article 7 paragraph 2 and base its regulation on the majority of the supervised persons or entities at the time. The foregoing is subject to more stringent requirements, in particular with regard to risks to the stability of the financial system.2 The Federal Council may authorise FINMA in matters of limited importance, and in particular in predominantly technical matters, to issue implementing provisions to this Act and to the financial market acts.109 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 56 Implementation  FINMA is responsible for the implementation of this Act and of the financial market acts.Chapter 2 Amendment of Other Legislative Instruments110 110 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 57 The amendment of current legislation is regulated in the Annex.Chapter 3 Transitional Provisions111 111 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 58112 Transitional Provision to the Amendment of 15 June 2018  Applications for authorisation under Article 43c paragraph 1 must be submitted no later than six months after the Amendment of 15 June 2018 comes into force. FINMA shall issue a decision on the application within six months of receipt.112 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 59 Transfer of employment relationships  1 The employment relationships of the staff of the Federal Banking Commission, of the Federal Office of Private Insurance and of the Anti-Money Laundering Control Authority shall be transferred in accordance with Article 58 paragraph 1 to FINMA and shall be continued in accordance with this Act.2 There is no right to the continuation of any function, field of work or position within the organisational system; however, staff have a right to their current salary for a period of one year.3 Job application procedures will be carried out only if it proves necessary as a result of reorganisation or where there is more than one candidate.4 FINMA shall endeavour to carry out restructuring activities in a socially acceptable manner.Art. 60 Responsible employer  1 FINMA is the responsible employer for persons in receipt of a pension:a. who are allocated to the Federal Banking Commission, the Federal Office of Private Insurance or the Anti-Money Laundering Control Authority; andb. who have begun to draw an old age, invalidity or survivor’s pension from the occupational pension scheme with the Federal Pension Fund before the commencement of this Act.2 Where any incapacity to work, the cause of which subsequently leads to invalidity, begins before the commencement of this Act and the related pension begins to be drawn after its commencement, FINMA is also the responsible employer.Chapter 4 Referendum and Commencement113 113 Amended by Annex No II 16 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901). Art. 61 1 This Act is subject to an optional referendum.2 The Federal Council determines the date on which this Act comes into force.Commencement Date:114Articles 4, 7, 8, 9 paragraph 1 letters a–e and g–j as well as paragraphs 2–5, Articles 10–14, 17–20, 21 paragraphs 3 and 4, 53–55, 58 paragraph 2 second sentence, 59 paragraphs 2–4; Annex Number 4 (Federal Administrative Court Act), Heading before Article 31 and 33 letter b: 1 February 2008Other provisions: 1 January 2009114 AS 2008 5205Annex (Art. 57)Amendment of Current Law The federal acts below are amended as follows:...115115 The amendments may be consulted under AS 2008 5207.


type: legislation

jurisdiction: Switzerland

text: 957.1 English is not an official language of the Swiss Confederation. This translation is provided for information purposes only and has no legal force.Federal Acton Intermediated Securities(Federal Intermediated Securities Act, FISA)of 3 October 2008 (Status as of 1 February 2021)The Federal Assembly of the Swiss Confederation,based on Articles 98 paragraph 1 and 122 paragraph 1 of the Federal Constitution1,and having considered the Federal Council Dispatch dated 15 November 20062,decrees:1 SR 1012 BBl 2006 9315Chapter 1 Purpose, Scope and Definitions  Art. 1 Subject-matter and purpose  1 This Act regulates the custody of certificated and uncertificated securities by custodians and their transfer.2 It ensures the protection of property rights of investors. It contributes to legal certainty in international contexts, to the efficient settlement of securities transactions and to the stability of the financial system.Art. 2 Scope of application  1 This Act applies to intermediated securities that are credited to a securities account by a custodian. 2 It does not affect any provision regarding the registration of registered shares in the share register. Art. 3 Intermediated securities  1 Intermediated securities within the meaning of this Act are personal or corporate rights of a fungible nature against an issuer which3:a. are credited to a securities account; andb. may be disposed of by the account holder in accordance with the provisions of this Act.1bis An intermediated security within the meaning of this Act shall also be deemed to be any financial instrument held in custody in accordance with foreign law and any right to such a financial instrument, if it has a comparable function in accordance with such foreign law.42 Intermediated securities are effective against the custodian and any third party; they are beyond the reach of other creditors of the custodian.3 Footnote not relevant to the English text.4 Inserted by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 4 Custodians  1 A custodian within the meaning of this Act maintains securities accounts in the name of persons or groups of persons.2 The following are deemed to be custodians:a. banks within the meaning of the Banking Act of 8 November 19345;b.6 securities firms within the meaning of Article 41 of the Financial Institutions Act of 15 June 20187;c.8 fund management companies within the meaning of Article 32 of the Financial Institutions Act, insofar as they maintain unit accounts;d.9 central securities depositories within the meaning of Article 61 of the Financial Market Infrastructure Act of 19 June 201510;e. the Swiss National Bank within the meaning of the National Bank Act of 3 October 200311;f.12 Swiss Post within the meaning of the Postal Services Organisation Act of 17 December 201013; andg.14 DLT trading facilities under Articles 73a to 73f of the Financial Market Infrastructure Act of 19 June 201515 in relation to immobilised ledger-based securities under Articles 973d to 973i of the Code of Obligations16.3 Foreign banks, foreign securities firms and other foreign financial institutions, as well as central securities depositories and other financial intermediaries that maintain securities accounts in the course of their business activity are also deemed custodians.175 SR 952.06 Amended by Annex No II 17 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).7 SR 954.18 Amended by Annex No II 17 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).9 Amended by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).10 SR 958.111 SR 951.1112 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021 (AS 2021 33; BBl 2020 233).13 SR 783.114 Inserted by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021 AS 2021 33; BBl 2020 233).15 SR 958.116 SR 22017 Amended by Annex No II 17 of the Financial Institutions Act of 15 June 2018, in force since 1 Jan. 2020 (AS 2018 5247, 2019 4631; BBl 2015 8901).Art. 5 Definitions  In this Act:a. sub-custodian means a custodian which maintains securities accounts for other custodians;b. account holder means a person or group of persons in whose name a custodian maintains a securities account;c. investor means an account holder other than a custodian, or a custodian holding intermediated securities for its own account;d. qualified investor means a custodian; an insurance company subject to prudential supervision; a public-law entity, a pension fund or a company with professional treasury management;e. certificated securities in collective custody means certificated securities within the meaning of Article 973a of the Code of Obligations18;f. global certificate means a certificated security within the meaning of Article 973b of the Code of Obligations;g.19 uncertificated securities means rights within the meaning of Article 973c of the Code of Obligations;h.20 ledger-based securities means rights within the meaning of Article 973d of the Code of Obligations.18 SR 22019 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021 (AS 2021 33; BBl 2020 233).20 Inserted by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021 (AS 2021 33; BBl 2020 233).Chapter 2 Creation, Extinction and Conversion of Intermediated Securities Art. 6 Creation  1 Intermediated securities are created:a. when a custodian accepts certificated securities for collective custody and credits them to one or more securities accounts;b. when a custodian accepts a global certificate for custody and credits the respective rights to one or more securities accounts; c.21 when a custodian registers uncertificated securities in the main register and credits the respective rights to one or more securities accounts; ord.22 when ledger-based securities are transferred to a custodian and the respective rights are credited to one or more securities accounts.2 For each issue of uncertificated securities, a single custodian shall maintain the main register. The main register shall provide details of the issue, the quantity, and the nominal value of the uncertificated securities issued; it shall be public.233 On being transferred to a custodian, the ledger-based securities shall be immobilised in the securities ledger.2421 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).22 Inserted by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).23 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).24 Inserted by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).Art. 7 Conversion  1 Unless otherwise provided by the terms of issue or the issuer’s articles of association, an issuer may, at any time and without the account holder’s consent, convert certificated securities in collective custody, global certificates or uncertificated securities held or registered as a basis for intermediated securities into another form.25 It shall bear the conversion cost.2 Insofar as provided by the terms of issue or the issuer’s articles of association, an account holder may at any time require the issuer to deliver certificated securities in the quantity and of the kind corresponding to intermediated securities credited to the account holder’s securities account based on a global certificate or uncertificated securities.26 The account holder shall bear the cost of this conversion unless the terms of issue or the issuer’s articles of association provide otherwise.3 The custodian shall ensure that the conversion of the securities does not alter the total number of the personal and corporate rights issued.25 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).26 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).Art. 8 Extinction and delivery in general27  1 An account holder may at any time require the custodian to deliver certificated securities in the quantity and of the kind corresponding to intermediated securities credited to the account holder’s securities account provided that:a. certificated securities are held by the custodian or a sub-custodian; orb. the account holder is entitled to delivery of certificated securities under Article 7 paragraph 2.2 The account holder shall be entitled to the delivery of certificated securities in accordance with the custom and usage of the market on which the securities are traded. 3 The custodian shall ensure that the delivery to the account holder occurs only after the corresponding securities have been debited to the latter’s securities account.27 Amended by No I 4 of the FA of 21 June 2019 on the Implementation of the Recommendations of the Global Forum on Transparency and the Exchange of Information for Tax Purposes, in force since 1 Nov. 2019 (AS 2019 3161; BBl 2019 279).Art. 8a28 Delivery of bearer shares in companies limited by shares without listed equity securities  In the case of companies limited by shares without listed equity securities whose bearer shares are organised as intermediated securities, the custodian designated by the company in accordance with Article 697j paragraph 5 of the Code of Obligations29 shall ensure that the securities are only delivered:a. on the custodian ceasing its duties30: to the custodian in Switzerland designed as the replacement by the company;b. on the conversion of the bearer shares into registered shares: to the company;c. on the destruction of the bearer shares: to the company.28 Inserted by No I 4 of the FA of 21 June 2019 on the Implementation of the Recommendations of the Global Forum on Transparency and the Exchange of Information for Tax Purposes, in force since 1 Nov. 2019 (AS 2019 3161; BBl 2019 279).29 SR 22030 Corrected by the Federal Assembly Drafting Committee  (Art. 58 para. 1 ParlA; SR 171.10).Chapter 3 Sub-Custody and Availability of Intermediated Securities  Art. 9 Authorisation for sub-custody  1 A custodian may hold intermediated securities, certificated securities, uncertificated securities and ledger-based securities with a sub-custodian in Switzerland or abroad.31 The account holder's consent is not required.2 The account holder’s express consent is nonetheless required where the foreign sub-custodian is not subject to adequate regulatory supervision.31 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).Art. 10 Effects   1 A custodian credits to the securities account of its account holder the intermediated securities credited to its own securities account with a sub-custodian.2 If the custody of securities with a sub-custodian is not governed by this Act, the credit confers upon the account holder rights that are at least equal to the rights acquired by the custodian with the sub-custodian.Art. 11 Available intermediated securities  1 Each custodian shall hold with itself or with a sub-custodian intermediated securities (available securities) in a quantity and of a kind at least equal to the total of intermediated securities credited to the securities accounts of its account holders (credited securities).2 If the total number of available securities is less than the total number of credited securities, the custodian shall without delay acquire intermediated securities to the extent of the shortfall.3 The following are deemed to be available securities:a. intermediated securities credited to a securities account held by the custodian with a sub-custodian;b.32 certificated securities, ledger-based securities or global certificates that the custodian holds directly, or uncertificated securities entered in its main register; andc. readily available rights to delivery of intermediated securities from other custodians during the regulatory or customary settlement period for the corresponding market, provided that this period does not exceed eight days. 32 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).Art. 12 Segregation of own securities and account holder securities   1 If a custodian holds its own intermediated securities and that of its account holders in separate securities accounts with a sub-custodian, the intermediated securities of the account holders and their claims for delivery of intermediated securities shall not be affected by: a. a set-off agreement between the custodian and the sub-custodian to which the account holder is not a party; b. any right of pledge, retention, or foreclosure of the sub-custodian or of another person to which the account holder has not consented. 2 The custodian may dispose of an account holder’s intermediated securities only after having them transferred to its own account by exercising its right of use. 3 Any agreement to the contrary shall be invalid. Chapter 4 Rights deriving from the Custody of Intermediated Securities Section 1 General Rights of Account Holders  Art. 13 Principle  1 The creation of intermediated securities does not affect the rights of investors against the issuer.2 Unless otherwise provided by this Act, account holders may exercise their rights only through their custodian.Art. 14 Seizure and attachment  1 Where intermediated securities are seized, attached, or subjected to any other interim measure against the account holder, such measure shall be executed exclusively in the hands of the custodian maintaining the securities account to which the account holder’s intermediated securities are credited.2 Any seizure, attachment, or other interim measure executed against an account holder in the hands of a sub-custodian shall be void.Art. 15 Instructions   1 A custodian shall carry out the account holder’s instructions to dispose of intermediated securities pursuant to the contract between both parties.2 The custodian shall not be obliged or entitled to verify the legal grounds for the instruction.3 The account holder may revoke an instruction until the point in time provided in the contract with the custodian or in the applicable rules of the securities clearing and settlement system. An instruction shall in any case become irrevocable once the custodian has debited the account holder’s securities account.Art. 16 Statement   An account holder may at any time require its custodian to draw up a statement of the intermediated securities credited to its securities account. This statement is not a certificated security.Section 2 Rights of Account Holders in the event of a Custodian’s Liquidation Art. 17 Exclusion from custodian’s estate   1 If a custodian is subject to proceedings for compulsory liquidation, the liquidator shall exclude from the custodian’s estate up to the number of intermediated securities credited to securities account maintained by the custodian for its account holders:a. intermediated securities credited to a securities account that the custodian holds with a sub-custodian;b.33 certificated securities, ledger-based securities or global certificates that the custodian holds directly, or uncertificated securities entered in its main register; andc. readily available claims of the custodian to receive delivery of intermediated securities from third parties resulting from spot transactions, expired futures transactions, hedging transactions, or issues on behalf of account holders.2 If the custodian does not hold its own securities and that of its account holders in separate securities accounts with a sub-custodian, the securities credited to those accounts shall be presumed to belong to the custodian’s account holders.3 The liquidator of a custodian shall satisfy claims of sub-custodians arising out of the custody of the intermediated securities or the financing of their acquisition. 4 Intermediated securities and claims for delivery of intermediated securities excluded from the custodian’s estate shall be:a. transferred to the custodian designated by the account holder; orb.34 delivered to the account holder in the form of certificated securities; orc.35 transferred to the account holder in the form of ledger-based securities.5 Claims of the custodian under Article 21 are reserved.33 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).34 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).35 Amended by No I 9 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Feb. 2021  (AS 2021 33; BBl 2020 233).Art. 18 Exclusion from sub-custodian’s estate  If a sub-custodian is subject to proceedings for compulsory liquidation, the custodian shall seek the exclusion of its account holders’ intermediated securities from the sub-custodian’s estate.Art. 19 Shortfall  1 If the intermediated securities excluded from the custodian’s estate are not sufficient to satisfy the account holders in full, intermediated securities of the same kind held by the custodian for its own account shall also be excluded insofar as necessary, even where such intermediated securities have been held separately from the account holders’ intermediated securities. 2 If the account holders are still not fully satisfied, they shall bear the shortfall in proportion to the number of intermediated securities of the missing kind credited to their respective securities accounts. They shall have a corresponding claim for compensation against the custodian.Art. 20 Finality of instructions  An instruction issued by a custodian which is a participant in a securities clearing or settlement system shall be legally binding and effective against third parties even in the event of debt enforcement proceedings against that custodian, provided that:a. the instruction was entered into the system before the commencement of such proceedings; orb. it was entered into the system after the commencement of such proceedings and carried out on the day of commencement, if the system operator can prove that it was not aware, and should not have been aware, of the commencement of such proceedings.Section 3 Rights of a Custodian in Intermediated Securities  Art. 21 Right of retention and foreclosure   1 A custodian shall be entitled to retain and foreclose on intermediated securities credited to a securities account, provided a debt owed by the account holder is due and arises from the custody of the intermediated securities or the financing of their acquisition.2 The right of retention and foreclosure shall cease when the custodian credits the intermediated securities to the account of another account holder.Art. 22 Right of use  1 An account holder may authorise its custodian to dispose of its intermediated securities in its own name and on its own account, in particular to grant a security interest in the same. 2 Unless the account holder is a qualified investor, authorisation must be granted in writing. It may not be included in general terms and conditions.Art. 23 Return of collateral  1 If an account holder has granted a security interest to a custodian, and the custodian has exercised a right of use by creating a security interest, the custodian shall return to the account holder intermediated securities in the same quantity and of the same kind no later than the due date for the performance of the secured obligation.2 These intermediated securities shall be subject to the same security interest as the original security interest, and shall be treated as if they had been provided at the same time as the original security interest.3 To the extent provided by the security agreement with the account holder, the custodian may realise the intermediated securities in accordance with Article 31 instead of returning them.Art. 23a36 Passing on of information  The custodian designated by a company limited by shares under Article 697i paragraph 4 or Article 697j paragraph 3 of the Code of Obligations37 must ensure that on request downstream custodians pass on the following information:a. the first name and surname or business name and address of the shareholder; andb. the first name and surname and address of the beneficial owner.36 Inserted by No I 8 of the Federal Act of 12 Dec. 2014 on the Implementation of the revised recommendations 2012 of the Financial Action Task Force, in force since  1 July 2015 (AS 2015 1389; BBl 2014 605).37 SR 220Chapter 5 Disposition of Intermediated Securities and Effectiveness against Third Parties Section 1 Disposition of Intermediated Securities  Art. 24 Credit38  1 A disposition of intermediated securities may be effected by:a. an instruction from the account holder to its custodian to transfer the intermediated securities; andb. a credit of the intermediated securities to the acquirer’s securities account.2 The disposition shall be complete when the necessary credit has been made and has become effective against third parties. If the full legal rights are transferred as a result of the disposition, the transferor shall lose its rights in the intermediated securities.39 3 The foregoing is without prejudice to the provisions governing acquisition by virtue of universal succession or debt enforcement.4 This Article does not affect restrictions on the transfer of registered shares. Any other restriction is be ineffective against the transferee or third parties.38 Amended by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).39 Amended by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 2540 Control agreement  1 An act of disposal for intermediated securities may also be created, and becomes effective against third parties when the account holder and the custodian agree irrevocably that the custodian must carry out instructions from the acquirer without any further consent or cooperation on the part of the account holder.2 The act of disposal may relate to:a. specific intermediated securities;b. all intermediated securities credited to a securities account; orc. a proportion of the intermediated securities credited to a securities account up to a specified value.40 Amended by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 2641 Agreement with the custodian  1 The account holder may dispose of intermediated securities in favour of the custodian by concluding an agreement with it. The act of disposal shall be effective against third parties upon conclusion of the agreement.2 Article 25 paragraph 2 applies.41 Amended by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Section 2 Reversal  Art. 27 Reversal of a debit  1 A debit to a securities account must be reversed if:a. it was made without instructions;b. it was made on the basis of an instruction that:1. is void, 2. was not issued by the account holder or the latter’s agent,3. was revoked in due time by the account holder, or 4. was voided on the ground of mistake, erroneous transmission, fraud or duress; Article 26 of the Code of Obligations42 is reserved;c. the credit of intermediated securities to the acquirer's securities account does not correspond to the instruction or is not executed within the customary settlement period.2 In the event of a reversal under paragraph 1 letter a or b, the account holder must prove that the instruction was defective. There is no right to reversal if the custodian proves that it did not know the defect in the instruction and could not be expected to know such defect despite the application of reasonable measures and procedures.3 The reversal shall place the account holder in the same position as if the debit had never been made. Claims for damages under the provisions of the Code of Obligations are reserved.4 Claims based on this Article become time-barred three years after the defect is discovered, or at the latest ten years after the date on which debit was made.435 An account holder who is a qualified investor may derogate from this Article by entering into an agreement with the custodian.42 SR 22043 Amended by Annex No 29 of the FA of 15 June 2018 (Revision of the Law of Prescription), in force since 1 Jan. 2020 (AS 2018 5343; BBl 2014 235).Art. 28 Reversal of a credit  1 A custodian may reverse a credit of intermediated securities to a securities account if: a. the corresponding debit was reversed; orb. the credit does not correspond to the instruction.2 The account holder shall be notified of the reversal.3 A credit may not be reversed where intermediated securities of the same kind are no longer credited to that securities account or where third parties acting in good faith have acquired rights in those intermediated securities. In such cases the custodian shall have a claim for damages unless the account holder has disposed of the securities in good faith or had no reason to expect a demand for restitution when disposing of them. 4 Claims based on this Article become time-barred three years after the defect is discovered, or at the latest ten years after the date on which the credit was made.445 An account holder who is a qualified investor may derogate from this Article by entering into an agreement with the custodian.44 Amended by Annex No 29 of the FA of 15 June 2018 (Revision of the Law of Prescription), in force since 1 Jan. 2020 (AS 2018 5343; BBl 2014 235).Section 3 Effectiveness against Third Parties  Art. 29 Protection of the bona fide purchaser  1 A person who acquires intermediated securities under Articles 24, 25 or 26 for value and in good faith shall be protected in respect of the acquisition even where:a. the transferor had no power or authority to transfer the intermediated securities; orb. the credit of intermediated securities to the transferor's securities account was reversed.2 An acquirer who is not so protected is under a duty to make restitution of intermediated securities in the same quantity and of the same kind pursuant to the provisions of the Code of Obligations45 on unjust enrichment. The rights of third parties are not affected. The foregoing is without prejudice to other claims based on the Code of Obligations.3 Where the acquirer who is bound to make restitution of the securities becomes subject to proceedings for compulsory liquidation, the beneficiary may require intermediated securities in the same quantity and of the same kind to be excluded from the acquirer’s estate to the extent that it contains such intermediated securities.4 Claims based on this paragraph 2 become time barred three years after the holder of the debited account becomes aware of its rights and of the identity of its debtor, or at the latest ten years after the debit date. Article 60 paragraph 2 of the Swiss Code of Obligations is reserved.465 Where the conditions for reversal of a credit under Article 28 are met, the acquirer may not object to the reversal on the basis of this Article.45 SR 22046 Amended by Annex No 29 of the FA of 15 June 2018 (Revision of the Law of Prescription), in force since 1 Jan. 2020 (AS 2018 5343; BBl 2014 235).Art. 30 Priorities  1 Where intermediated securities or interests in intermediated securities are disposed of pursuant to provisions of this Act, the disposition first in time shall prevail over further dispositions.2 If the custodian has entered into an agreement with the account holder under Article 25 paragraph 1 without notifying the acquirer expressly of its rights created earlier, its right shall be deemed to be subordinated to the right of the acquirer.473 ...484 The foregoing is without prejudice to agreements to modify the priorities of rights over intermediated securities, but such agreements are effective only as between the parties bound by them.47 Amended by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).48 Repealed by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, with effect from 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Chapter 6 Realisation of Collateral  Art. 31 Power to realise collateral  1 The secured party may realise intermediated securities in which a security interest has been created according to the terms and conditions stipulated in the security agreement by:a. selling the intermediated securities and offsetting the proceeds against the secured debt; orb. appropriating the intermediated securities whose value can be determined objectively and offsetting their value against the secured debt.492 This power is not affected by the commencement of debt enforcement, reorganisation or protective proceedings in respect of the provider of the security interest.3 The custodian is not bound or entitled to verify whether the conditions for realisation of the intermediated securities are fulfilled.4 The foregoing is without prejudice to the liability of the beneficiary of a security interest who realises intermediated securities where the conditions for realisation are not fulfilled. 49 Amended by Annex No 14 of the Financial Market Infrastructure Act of 19 June 2015, in force since 1 Jan. 2016 (AS 2015 5339; BBl 2014 7483).Art. 32 Notice and accounts  1 The secured party shall give notice to the provider of the security interest before realisation. A provider of a security interest who is a custodian or a qualified investor may waive the notice requirement.2 The secured party shall account to the provider of the security interest and remit to the latter any excess proceeds of the realisation.Chapter 7 Liability  Art. 33 1 A custodian shall be liable for the loss caused to an account holder in relation to the custody or transfer of intermediated securities, pursuant to the provisions of the Code of Obligations50, unless otherwise provided in this Article.2 A custodian which is authorised to hold intermediated securities with a sub-custodian shall be liable for any failure to exercise due care in the selection and instruction of the sub-custodian and in verifying its continued compliance with the selection criteria. 3 A custodian may waive its liability under paragraph 2 if the account holder has expressly designated the sub-custodian contrary to the custodian’s advice.4 A custodian shall be liable, as if they were its own, for the acts of a sub-custodian which: a. independently and over a long period of time administers and settles all securities transactions on behalf of the custodian; or b. is part of the same economic entity as the custodian.5 Agreements to the contrary shall be valid only as between custodians or when made in favour of investors. 50 SR 220Chapter 8 Final Provisions  Art. 34 Amendments to existing law  Amendments to existing law are contained in the Annex hereto.Art. 35 Transitional provisions  1 Issuers of uncertificated securities credited to securities accounts maintained by a custodian shall have the main registry set up by a custodian within six months from the effective date of this Act and have the uncertificated securities registered therein.2 If, before this Act comes into force, certificated securities in collective deposit, global certificates, or uncertificated securities held by a custodian are disposed of in a manner that fails to comply with the requirements of this Act, the right thus created shall prevail over any right created after the commencement date of the Act provided that the beneficiary effects the book entries required by the Act or causes them to be effected within 12 months after the commencement date hereof.Art. 36 Referendum and commencement  1 This Act is subject to an optional referendum.2 The Federal Council shall set the commencement date.Commencement date:51 1 January 2010Art. 470 para. 2bis of the Code of Obligations (No 3 of Annex): 1 October 200951 FCD of 6 May 2009.Annex (Art. 34)Amendment of Current Legislation The federal acts below are amended as follows:...5252 The amendments may be consulted under AS 2009 3577.