type: legislation

jurisdiction: Switzerland

text: 952.05 English is not an official language of the Swiss Confederation. This translation is provided for information purposes only and has no legal force.Ordinanceof the Swiss Financial Market Supervisory Authority on the Insolvency of Banks and Securities Firms1(FINMA Banking Insolvency Ordinance, BIO-FINMA)of 30 August 2012 (Status as of 1 January 2021)1 Term in accordance with Annex No 3 of the FINMA O of 4 Nov. 2020 on Financial Institutions, in force since 1 Jan. 2021 (AS 2020 5327). This amendment has been made throughout the text.The Swiss Financial Market Supervisory Authority (FINMA),based on Articles 28 paragraph 2 and 34 paragraph 3 of the Banking Act of 8 November 19342 (BankA), Article 67 of the Financial Institutions Act of 15 June 20183 (FinIA), and Article 42 of the Mortgage Bond Act of 25 June 19304 (MBA),5decrees:2 SR 952.0 3 SR 954.14 SR 211.423.45 Amended by Annex No 3 of the FINMA O of 4 Nov. 2020 on Financial Institutions, in force since 1 Jan. 2021 (AS 2020 5327).Chapter 1 General Provisions  Art. 1 Object  This Ordinance defines restructuring proceedings and bankruptcy proceedings under Articles 28-37g BankA.Art. 2 Scope of application  1 In this Ordinance, banks are:6a.banks under the BankA;b.7securities firms and fund management companies under the FinIA;c.central mortgage bond institutions under the MBA.2 The provisions on bank restructuring (Arts. 40–57) do not apply to individuals and legal entities operating without the requisite licence. FINMA may declare them applicable where there is sufficient public interest.6 Amended by Annex No 3 of the FINMA O of 4 Nov. 2020 on Financial Institutions, in force since 1 Jan. 2021 (AS 2020 5327).7 Amended by Annex No 3 of the FINMA O of 4 Nov. 2020 on Financial Institutions, in force since 1 Jan. 2021 (AS 2020 5327).Art. 3 Universality  1 If bankruptcy proceedings or restructuring proceedings are opened, they cover all realisable assets in a bank’s possession at the time in question, regardless of whether they are located in Switzerland or abroad.2 All Swiss and foreign creditors of the bank and its foreign branches are equally entitled to participate in bankruptcy proceedings or restructuring proceedings opened in Switzerland and enjoy the same privileges.3 The assets of a branch of a foreign bank operating in Switzerland include all assets in Switzerland and abroad that are constituted by parties acting on behalf of that branch.Art. 4 Public notices and communications  1 Public notices are published in the Swiss Official Gazette of Commerce and on the FINMA website.2 Communications are sent directly to creditors whose name and address are known. If it simplifies the proceedings, FINMA may require creditors domiciled or residing abroad to appoint an authorised person for service in Switzerland. For reasons of urgency or to simplify the procedure, direct communications may be dispensed with.3 With regard to deadlines and the legal consequences associated with a public notice, publication in the Swiss Official Gazette of Commerce is the deciding factor.Art. 5 Inspection of documents  1 Any person making a credible claim that their financial interests are directly affected by the restructuring or the bankruptcy is entitled to inspect documents relating to the restructuring or the bankruptcy, although professional confidentiality in accordance with Article 47 BankA and Article 69 FinIA must be observed wherever possible.82 The right to inspect documents may be restricted to specific stages of the proceedings, or it may be limited or refused where opposing interests take precedence.3 Any person granted the right to inspect documents may only use the information received through inspecting documents to protect their own immediate financial interests.4 The right to inspect documents may be made dependent on a declaration which states the information inspected may only be used to protect the individual’s own immediate financial interests. In the event of any failure to comply, reference may be made in advance to the criminal penalties under Article 48 of the Financial Market Supervision Act of 22 June 20079 and Article 292 of the Swiss Criminal Code10.5 The restructuring agent or bankruptcy administrator and, following completion of the restructuring proceedings or bankruptcy proceedings, FINMA shall decide on the right to inspect documents.8 Amended by Annex No 3 of the FINMA O of 4 Nov. 2020 on Financial Institutions, in force since 1 Jan. 2021 (AS 2020 5327).9 SR 956.110 SR 311.0Art. 6 Complaints to FINMA  1 Any person whose interests are adversely affected by a decision, an act or an omission by a person who was entrusted with tasks in accordance with this Ordinance may make a complaint to FINMA.2 Any decisions made by these persons are not regarded as rulings and the complainants are not deemed to be parties within the meaning of the Federal Act of 20 December 196811 on Administrative Procedure.3 FINMA shall assess the facts reported, take the necessary measures and issue a ruling if required. 11 SR 172.021Art. 7 Insolvency venue  1 The insolvency venue is the location of the registered office of the bank or the Swiss branch of a foreign bank.2 If a bank has more than one registered office or a foreign bank has more than one Swiss branch, there will only be one insolvency venue. This venue shall be determined by FINMA.3 In the case of individuals, the insolvency venue is the person’s business domicile at the time the bankruptcy proceedings or restructuring proceedings are opened.Art. 8 Book claims and liabilities   The bank’s claims and liabilities are deemed to be book claims and liabilities where the bank’s books are kept properly and the bankruptcy liquidator is genuinely able to discern that the claim or liability exists and the extent to which they exist.Art. 9 Coordination  FINMA and the restructuring agent or bankruptcy liquidator shall coordinate their actions as far as possible with authorities and governing bodies in Switzerland and abroad.Art. 10 Recognition of foreign bankruptcy decrees and measures  1 Where FINMA recognises a foreign bankruptcy decree or a foreign insolvency measure in accordance with Article 37g BankA, the provisions of this Ordinance apply to the assets located in Switzerland.2 Even if there are no reciprocal rights, FINMA may meet recognition requests where this is in the interests of the creditors affected.3 It shall determine one insolvency venue in Switzerland and the privileged creditors under Article 37g paragraph 4 BankA.4 It shall give public notice of the recognition and the circle of creditors.Chapter 2 Bankruptcy  Section 1 Procedure  Art. 11 Publication and notice to creditors  1 FINMA shall inform the bank of the bankruptcy order and give public notice of it together with notice to creditors.2 Public notice shall be given of the following details in particular:a.the bank’s name as well as its registered office and branches;b.the date and time of the opening of bankruptcy proceedings;c.the bankruptcy venue;d.the name and address of the bankruptcy liquidator;e.a notice to creditors and persons who have claims to assets held with the bank instructing them to register their claims, together with proof of the same, with the bankruptcy liquidator within a specific deadline;f.a reference to claims that qualify as registered under Article 26;g.a reference to the surrender and reporting obligations under Articles 17–19.3 The bankruptcy liquidator may provide known creditors with a copy of the notice.Art. 12 Appointing a bankruptcy liquidator  1 FINMA shall issue a ruling appointing a bankruptcy liquidator unless it is to carry out the liquidator's duties itself.2 Where FINMA appoints a bankruptcy liquidator, it must ensure when making its choice that the liquidator has sufficient time and expertise to perform the mandate diligently, efficiently and effectively and is not subject to any conflict of interests that might compromise his or her ability to perform the mandate.3 It specifies the details of the task, in particular regarding the bankruptcy liquidator’s costs, reporting and control.Art. 13 The bankruptcy liquidator’s tasks and powers  The bankruptcy liquidator conducts the proceedings. In particular, he or she must:a.create the technical and administrative conditions for conducting the bankruptcy;b.secure and realise the bankruptcy assets;c.put in place the executive management required for the bankruptcy proceedings;d.represent the bankruptcy assets and other authorities before the courts;e.ensure, in conjunction with the agency of the deposit protection scheme, that the deposits protected under Article 37h BankA are identified and paid out.Art. 14 Assembly of creditors  1 If the bankruptcy liquidator deems it necessary to convene an assembly of creditors, he or she shall submit a request to this effect to FINMA. The latter shall stipulate the powers of the assembly of creditors as well as the quorum and voting majority requirements.2 All creditors are entitled to attend or be represented at the assembly. In cases of doubt, the bankruptcy liquidator decides on admission.3 The bankruptcy liquidator chairs the hearing and reports on the bank’s assets and the progress of the proceedings.4 The creditors may pass resolutions by circular vote. Creditors who do not expressly reject the bankruptcy liquidator’s proposal within the specified deadline are regarded as being in agreement with it.Art. 15 Committee of creditors  1 FINMA decides, at the request of the bankruptcy liquidator, on the appointment, composition, tasks and powers of a committee of creditors.2 If the agency of the deposit protection scheme has paid out a substantial amount of privileged assets under Article 37h BankA, it must nominate a person to represent its interests on the committee of creditors.3 FINMA determines the chair, the voting procedure and the compensation of the individual members.Section 2 Bankruptcy Assets  Art. 16 Inventory  1 The bankruptcy liquidator draws up an inventory of the bankruptcy assets.2 The inventory is drawn up in accordance with Articles 221 to 229 of the Federal Act of 11 April 188912 on Debt Enforcement and Bankruptcy (DEBA), unless this Ordinance provides otherwise.3 The assets held in custody that are to be segregated under Article 37d BankA and investment funds that are to be segregated under Article 40 FinIA must be recorded in the inventory at their market value at the time the bankruptcy proceedings were opened. The inventory shall refer to the following claims that conflict with segregation:a.bank claims against the depositors;b.claims by the fund management company against the investment fund.134 The bankruptcy liquidator shall submit a request to FINMA for the measures required to secure the bankruptcy assets.5 He or she shall forward the inventory to the banker or a person selected by the bank’s owners to act as the bank’s agent. This person must confirm that the inventory is complete and correct. Their confirmation must be recorded in the inventory.12 SR 281.113 Amended by Annex No 3 of the FINMA O of 4 Nov. 2020 on Financial Institutions, in force since 1 Jan. 2021 (AS 2020 5327).Art. 17 Surrender and reporting obligation  1 The bank’s debtors and persons who have taken possession of the bank’s assets through a pledge or for any other reason must report to the bankruptcy liquidator within the deadline specified in Article 11 paragraph 2 letter e and release the assets to him or her.2 Claims for which the right to offset has been asserted must still be reported.3 Any existing pre-emptive right lapses in the event of an unjustifiable failure to report or surrender.Art. 18 Exceptions to the obligation to surrender  1 Securities and other financial instruments serving as collateral need not be surrendered provided the legal conditions for the collateral recipient to take responsibility for their realisation are met.2 However, these assets must be reported, together with proof of the right to realise them, to the bankruptcy liquidator, who shall make a note of them in the inventory.3 The collateral recipient must agree a settlement with the bankruptcy liquidator over the proceeds from the realisation of these assets. Any surplus accrues to the bankruptcy assets.Art. 19 Exceptions to the obligation to report  FINMA may waive the requirement for debtors to be reported in respect of book claims.Art. 20 Segregation  1 The bankruptcy liquidator checks the surrender of assets claimed by third parties.2 If he or she believes a surrender claim to be justified, the bankruptcy liquidator shall offer the creditors the opportunity to demand assignment of their right to object under Article 260 paras. 1 and 2 DEBA14 and set a reasonable deadline for this purpose.3 If he or she believes a surrender claim to be unjustified, or if creditors have demanded assignment of their right to object, the bankruptcy liquidator shall set the person making the claim a deadline for filing an action before the court at the bankruptcy venue. If the deadline is allowed to expire, the surrender claim is regarded as waived.4 In the case of assignment, the action must be filed against the assignee creditors. The bankruptcy liquidator shall provide the third party with the details of the assignee creditors when setting the deadline.14 SR 281.1Art. 20a15 Segregation in the bankruptcy of a fund management company  1 If the continuation of an investment fund is in the interests of the investors, the bankruptcy liquidator shall request FINMA to transfer the investment fund concerned with all its rights and obligations to another fund management company.2 If no other fund management company is prepared to take over the investment fund, the bankruptcy liquidator shall request FINMA to liquidate the investment fund concerned as part of the bankruptcy of the fund management company.15 Inserted by Annex No 3 of the FINMA O of 4 Nov. 2020 on Financial Institutions, in force since 1 Jan. 2021 (AS 2020 5327).Art. 21 Assets due, bankruptcy estate and contestation  1 Claims falling due to the bankruptcy assets are collected by the bankruptcy liquidator, through debt enforcement if necessary.2 The bankruptcy liquidator shall check claims on the part of the bankruptcy assets for movable assets in the custody or co-custody of a third party or land entered in the Land Register in the name of a third party.3 He or she shall also check if legal transactions under Articles 285 to 292 DEBA16 may be contested. The duration of any prior restructuring proceedings or any prior order for protective measures under Article 26 paragraph 1 letters e-h BankA are not taken into account in the deadlines under Articles 286 to 288 DEBA.4 If the bankruptcy liquidator intends to pursue a contested claim in accordance with paragraph 2 or 3 through the actions process, he or she shall obtain approval and appropriate instructions from FINMA.5 If the bankruptcy liquidator does not file a claim, he or she shall give the creditors the opportunity to demand assignment within the meaning of Article 260 paragraphs 1 and 2 DEBA or to realise the claims in question and any other entitlements under Article 31.6 If he or she gives the creditors the opportunity to demand assignment, he or she shall set them an appropriate deadline.7 Realisation in accordance with Article 31 is not permitted in the case of contested claims under paragraph 3 or responsibility claims under Article 39 BankA.16 SR 281.1Art. 22 Continuation of ongoing proceedings under civil and administrative law  1 The bankruptcy liquidator shall assess claims on the part of the bankruptcy assets that are already the subject of proceedings under civil and administrative law at the time the bankruptcy proceedings are opened and submit a request to FINMA for the continuation of these proceedings.2 If FINMA rejects a request for continuation, the bankruptcy liquidator shall give the creditors the opportunity to demand assignment of their right to continue proceedings within the meaning of Article 260 paragraphs 1 and 2 DEBA17 and set a reasonable deadline for this purpose.17 SR 281.1Art. 23 Discontinuation due to lack of assets  1 If the bankruptcy assets are not sufficient to continue the bankruptcy proceedings, the bankruptcy liquidator shall submit a request to FINMA to discontinue the proceedings.2 FINMA shall continue the proceedings in exceptional cases, in particular where there is a special interest in doing so, even if the bankruptcy assets are not sufficient.3 If FINMA intends to discontinue proceedings, it shall give public notice of this fact, stating that it will continue them if a creditor can provide security for the costs of the proceedings not covered by the bankruptcy assets within a specified deadline. FINMA shall set the deadline as well as the type and amount of the security.4 If the required security is not provided within the deadline, all pledgees may demand realisation of the assets pledged in their favour by FINMA within a deadline specified by the latter. FINMA shall instruct a bankruptcy liquidator to proceed with the realisation.5 In the case of legal entities, FINMA shall order the realisation of assets that are not subject to a demand for realisation from a pledgee within the specified deadline. Any proceeds remaining after the realisation costs and any encumbrances attached to individual assets are covered go to the federal government once the costs incurred by FINMA have been covered.6 Where bankruptcy proceedings against individuals are discontinued, the debt enforcement procedure is governed by Article 230 paragraphs 3 and 4 DEBA18.18 SR 281.1Section 3 Bankruptcy Liabilities  Art. 24 Groups of creditors  1 Where a joint claim against the bank exists, the group shall be treated as a creditor in its own right, separate from its individual members.2 Solidary claims shall be attributed to the solidary creditors in equal shares, provided the bank has no setting-off right. The shares are treated as claims on the part of each individual solidary creditor.Art. 25 Privileged deposits  1 Under Article 37a BankA privileged deposits are:a.client claims arising from banking or securities dealing operations that are booked or should be booked as liabilities from client deposits in the balance-sheet;b.medium-term notes booked as medium-term notes in the balance sheet that are deposited at the bank in the depositor’s name.192 Within the meaning of Article 37a BankA privileged deposits are not:a.bearer claims;b.medium-term notes that are not held at the bank;c.contractual and non-contractual compensation claims such as compensation claims for custody assets no longer at the bank’s disposal in accordance with Article 37d BankA.3 Claims on the part of bank foundations under Article 5 paragraph 2 of the Ordinance of 13 November 198520 on Tax-deductible Contributions to Recognised Forms of Retirement Provision and on the part of vested benefits foundations under Article 19 paragraph 2 of the Vested Benefits Ordinance of 3 October 199421 qualify as deposits belonging to the individual pension fund members and policy holders. However, these claims shall be paid out to the respective bank foundation or vested benefits foundation.19 Amended by No I of the FINMA Ordinance of 27 March 2014, in force since 1 Jan. 2015 (AS 2014 1309).20 SR 831.461.321 SR 831.425Art. 26 Verification of claims  1 The bankruptcy liquidator shall verify the claims registered and those to be considered by law. He or she may make enquiries personally and ask the creditors to provide additional proof.2 The following claims shall be considered by law:a.land register claims, complete with accrued interest; andb.book claims under Article 8.3 The bankruptcy liquidator obtains a statement of claims that are not book claims from the banker or from a person selected by the bank’s owners to act as the bank’s agent. Art. 27 Schedule of claims  1 The bankruptcy liquidator shall decide whether, to what extent and with what rank claims are recognised and shall draw up the schedule of claims.2 If the bankruptcy assets include land, he or she shall draw up a schedule of the encumbrances on that land such as rights of lien, easements, land charges and priority notices. This schedule shall form part of the schedule of claims.3 The bankruptcy liquidator may with FINMA’s consent draw up a separate schedule of claims for claims secured by a registered pledge if systemic risks can only be restricted by doing so.Art. 28 Claims subject to proceedings under civil and administrative law  1 Claims that are already the subject of proceedings under civil or administrative law at the time the bankruptcy proceedings are opened in Switzerland must initially be marked in the schedule of claims pro memoria.2 If the bankruptcy liquidator opts not to continue the proceedings under civil and administrative law, he or she shall give the creditors the opportunity to demand assignment in accordance with Article 260 paragraph 1 DEBA22.3 Unless proceedings under civil and administrative law are continued by the bankruptcy assets or by individual assignee creditors, the claim is deemed to be recognised, and the creditors no longer have any right to contest it via an action to contest the schedule of claims.4 Where proceedings are continued by individual assignee creditors, the amount by which the success of these proceedings reduces the subordinated creditors’ share of the bankruptcy assets serves to satisfy the assignee creditors up to the full coverage of their collocated claims as well as the cost of the proceedings. Any surplus accrues to the bankruptcy assets.22 SR 281.1Art. 29 Inspection of the schedule of claims  1 The creditors may inspect the schedule of claims under Article 5 for a period of at least 20 days.2 The bankruptcy liquidator shall give public notice of when and how the schedule of claims may be inspected.3 He or she may provide for inspection at the Bankruptcy Office in the bankruptcy venue.4 The bankruptcy liquidator shall inform every creditor whose claim was not collocated as registered or as a book or land register claim why the claim was rejected in full or in part.Art. 30 Actions to contest the schedule of claims  1 Actions to contest the schedule of claims are governed by Article 250 DEBA23.2 The deadline for actions runs from the point when the schedule of claims may first be inspected.23 SR 281.1Section 4 Realisation  Art. 31 Type of realisation  1 The bankruptcy liquidator shall decide on the type and timing of realisation and shall carry it out.2 Pledged assets may not be realised by means other than a public auction except with the pledgees’ consent.3 Assets may be realised without delay if they:a.are subject to rapid depreciation;b.generate unreasonably high administrative costs;c.are traded on a representative market; or d.are of insignificant value.Art. 32 Public auction  1 Public auctions are held in accordance with Articles 257–259 DEBA24 unless this Ordinance specifies otherwise.2 The bankruptcy liquidator shall conduct the auction. He or she may set a reserve price for the first auction in the terms and conditions.3 He or she shall give public notice that the terms and conditions may be inspected. He or she may provide for inspection at the Bankruptcy or Debt Enforcement Office at the bankruptcy venue.24 SR 281.1Art. 33 Assignment of legal claims  1 In the certificate of assignment pertaining to a legal claim on the part of the bankruptcy assets within the meaning of Article 260 DEBA25, the bankruptcy liquidator shall specify the deadline within which the assignee creditors must assert their claim before the court. If the deadline is allowed to expire, the assignment lapses.2 The assignee creditors shall report without delay the outcome of their assertion to the bankruptcy liquidator and, following completion of the bankruptcy proceedings, to FINMA.3 Where no creditor demands assignment or the deadline expires without the claim being asserted, the bankruptcy liquidator and, following completion of the bankruptcy proceedings, FINMA shall decide on any further realisation of the legal claims in question.25 SR 281.1Art. 34 Contestation of realisation actions  1 The bankruptcy liquidator shall periodically draw up a realisation plan containing information on the bankruptcy assets awaiting realisation and the nature of their realisation.2 Realisation actions that may proceed without delay in accordance with Article 31 need not be included in the realisation plan.3 The assignment of legal claims under Article 33 does not constitute a realisation action.4 The bankruptcy liquidator forwards the realisation plan to the creditors and sets them a deadline within which they may demand a contestable ruling from FINMA on individual realisation actions contained therein.Section 5 Distribution  Art. 35 Bankruptcy liabilities  The following liabilities are covered first from the bankruptcy assets in the order listed:a.liabilities under Article 37 BankA and under Article 43 of this Ordinance;b.liabilities incurred by the bankruptcy assets during the proceedings;c.all costs incurred through the opening and conduct of the bankruptcy proceedings;d.liabilities towards a third-party custodian under Article 17 paragraph 3 of the Book Entry Securities Act of 3 October 200826.26 SR 957.1Art. 36 Distribution  1 The bankruptcy liquidator may provide for provisional distributions. He or she shall draw up a provisional distribution list for this purpose and forward it to FINMA for approval.2 If all assets have been realised and all processes relating to the calculation of assets and liabilities have been completed, the bankruptcy liquidator shall draw up the final distribution list as well as the final accounts and forward these to FINMA for approval. The proceedings conducted by individual creditors under Article 260 DEBA27 may be disregarded.3 Once the distribution list has been approved, the bankruptcy liquidator shall pay out to the creditors.4 No payout is made for claims:a.whose existence or amount has not been definitively established;b.whose beneficiaries are not definitively known;c.that are partially covered by collateral outside Switzerland or under Article 18 that has not been realised; ord.that are likely to be partially covered by a pending settlement in foreign foreclosure proceedings connected to the bank bankruptcy.5 If a separate schedule of claims is drawn up in accordance with Article 27 paragraph 3, the bankruptcy liquidator may with FINMA’s consent carry out the distribution once this Ordinance has entered into force, and independently of the entry into force of the schedule of claims regarding the remaining claims.27 SR 281.1Art. 37 Certificate of loss  1 Creditors may demand a certificate of loss under Article 265 DEBA28 for the amount of their claim that remains outstanding from the bankruptcy liquidator and, following completion of the bankruptcy proceedings, from FINMA against payment of a flat fee.2 The bankruptcy liquidator shall inform the creditors of this option when paying out their share.28 SR 281.1Art. 38 Depositing  1 Subject to the rules on dormant assets, FINMA shall issue the necessary instructions for depositing the shares not yet paid out as well as the segregated custody assets not yet surrendered.2 Deposited assets that become free or are not withdrawn after 10 years shall be realised and distributed in accordance with Article 39 unless special legislation provides otherwise.Art. 39 Assets discovered after the fact  1 If assets or other legal claims that have not previously been included in the bankruptcy assets are discovered within 10 years of the bankruptcy proceedings being completed, FINMA shall appoint a bankruptcy liquidator to restart the bankruptcy proceedings without further formalities.2 Assets discovered after the fact or legal claims shall be distributed to creditors who suffered a loss and for whom the bankruptcy liquidator has the details needed to make the payout. The bankruptcy liquidator may ask creditors to provide up-to-date details, stating that these are required in connection with their claim. He or she shall set a reasonable deadline for this purpose.3 Where it is clear that the costs incurred through restarting the bankruptcy proceedings will not be covered or will only be marginally exceeded by the expected proceeds from realising the assets discovered after the fact, FINMA may refrain from restarting the proceedings. In such cases, it shall pass the assets discovered after the fact to the federal government.Chapter 3 Restructuring  Section 1 Procedure  Art. 40 Prerequisites  1 The prospect of restructuring the bank or continuing individual banking services is justified if, at the time of the decision, there is sufficient evidence that:a.the creditors are likely to fare better from the restructuring than from the bankruptcy; andb.the restructuring plan is feasible in terms of time and scope.2 There is no automatic entitlement to opening restructuring proceedings.Art. 41 Opening  1 FINMA opens the restructuring proceedings with a ruling.2 It shall give public notice of the opening immediately.3 In its opening ruling, it shall specify whether existing protective measures under Article 26 BankA are to be maintained or altered, or replaced by new ones.4 When it opens the restructuring proceedings, it may also already approve the restructuring plan.Art. 42 Restructuring agent  1 FINMA shall issue a ruling appointing a restructuring agent, unless it is to carry out these duties itself.2 Where FINMA appoints a restructuring agent, it must ensure when making its choice that the agent has sufficient time and expertise to carry out the mandate diligently, efficiently and effectively and is not subject to any conflict of interests that might compromise its ability to perform the mandate.3 It shall determine the restructuring agent’s powers and whether he or she is authorised to act in place of the bank’s governing bodies. During the duration of the restructuring proceedings, he or she may in particular make commitments pertaining to the restructuring to be honoured by the bank.4 FINMA shall specify the details of the task, in particular with regard to the restructuring agent’s costs, reporting and control.Art. 43 Liabilities during the restructuring proceedings  During the restructuring proceedings, liabilities into which the bank enters with the restructuring agent’s consent shall, in the event that restructuring fails, be satisfied before all other claims in the ensuing bankruptcy proceedings.Art. 44 Restructuring plan  1 The restructuring plan shall set out the basic elements of the restructuring, the bank’s future capital structure and business model after the restructuring, and explains how it fulfils the conditions for approval under Article 31 paragraph 1 BankA.2 The restructuring plan shall also provide information on the following elements:a.future compliance with the licensing requirements;b.the bank’s assets and liabilities;c.the bank’s future organisation and management and, if the bank is part of a banking group or a banking conglomerate, the future organisation of the group or conglomerate;d.whether and how the restructuring plan affects the rights of the bank’s creditors as well as the owners;e.whether the bank’s right to contest legal acts and assert civil responsibility claims under Article 32 BankA are excluded;f.which current members of the bank’s governing bodies are to retain responsibility for its management, and why this is in the interests of the bank, its creditors and its owners;g.the severance settlements for departing members of governing bodies;h.those transactions which require an entry in the Commercial Register or in the Land Register; andi.the provisions in Sections 3 and 4 of this Chapter which are to be applied to a specific restructuring case.3 FINMA may request that the restructuring plan provide information on additional elements.Section 2 Approval of the Restructuring Plan  Art. 45 Approval  1 FINMA shall approve the restructuring plan with a ruling if the conditions stipulated in the BankA and this Ordinance are met.2 It shall give public notice of the approval and the basic features of the restructuring plan, stating how the affected creditors and owners can inspect the plan.3 If the restructuring plan orders the transfer of land, the granting of in rem rights and obligations over land or changes in the share capital, these orders shall have direct effect with the approval of the restructuring plan. The required entries in the Land Register, the Commercial Register or in any other register shall be made as soon as possible.2929  The correction of 6 Sept. 2016, concerns French text only (AS 2016 3099).Art. 46 Rejection by creditors  1 Where the restructuring plan provides for an intervention into creditors’ rights, FINMA sets the creditors a deadline at the latest with the approval of the restructuring plan within which they can reject it. The deadline is of at least ten working days. The transfer of liabilities and contractual relationships and the change of debtor involved do not infringe upon the rights of the creditors.2 Creditors wishing to reject the plan must do so in writing. They must give their name and address as well as the amount of their claim at the time of opening the restructuring proceedings, and the reasons for it. The rejection letter must be sent to the restructuring agent.Section 3 Corporate Actions  Art. 47 General provisions  1 If the restructuring plan allows corporate actions in accordance with this Section, it is necessary to ensure that:a.the creditors’ interests take precedence over the interests of the owners and the hierarchy of creditors is respected;b.the provisions of the Swiss Code of Obligations30 apply mutatis mutandis.2 Where granting pre-emption rights may endanger the restructuring, they may be denied to the owners. 30 SR 220Art. 48 Principles for converting debt capital into equity capital  1 If the restructuring plan provides for the conversion of debt capital into equity capital then:a.sufficient debt capital must be converted into equity capital to ensure that the bank holds the required capital to continue its business activities after the restructuring is completed;b.share capital must be completely written down before converting debt capital into equity capital;c.debt capital may be converted into equity capital only if the debt instruments issued by the bank which are part of additional core capital or supplementary capital have already been converted into equity capital, in particular contingent convertible bonds; d.the following order of rank shall be observed when converting debt capital into equity capital where claims of the next rank are only converted if the conversion of claims of the previous rank does not suffice to meet the capital adequacy requirements in accordance with letter a:1.subordinated claims without capital adequacy eligibility,2.other claims not excluded from the conversion, with the exception of deposits, and3.deposits, in so far as they are not privileged. Art. 49 Convertibility of claims  All debt capital may be converted into equity capital. The following are excluded:a.privileged claims in classes 1 and 2 according to Article 219 paragraph 4 DEBA31 and Article 37a paragraph 1-5 BankA to the extent that they are classed as preferential; andb.secured claims to the extent that they are secured and offsettable claims to the extent that they are offsettable, if the creditor can credibly demonstrate the existence, amount and fact that the claim is object of a relevant agreement, or this is evident from the bank’s books.31 SR 281.1Art. 50 Reduction in claims  In addition to or instead of converting debt capital into equity capital, FINMA may order a partial or full reduction in claims. Article 48 letters a–c and Article 49 apply equally.Section 4 Continuation of Certain Banking Services  Art. 51 Continuation of banking services   1 Where the restructuring plan provides for individual banking services or groups of services to be continued and for certain bank assets or contractual relationships to be transferred to another legal entity, including a bridge bank, it must in particular:a.name the legal entity or entities to which such banking services and assets are to be transferred;b.describe the assets, liabilities and contractual relationships to be transferred and the compensation to be provided for them;c.describe the banking services that are to be continued and transferred;d.list the corporate actions undertaken and, where banking services are to be transferred to a bridge bank, describe how assets and liabilities will be shared between the bank and the bridge bank;e.stipulate an obligation on the bank’s part to take any action necessary to ensure that all of the assets and objects to be transferred, including in particular those located abroad or subject to foreign law, can be transferred to the other legal entity;f.explain whether compensation is to be paid, how such compensation is to be calculated and whether a maximum compensation amount is to be imposed; g.explain whether systems and applications will be used jointly by the bank and the other legal entity and, if banking services are to be continued by a bridge bank, how the latter will be guaranteed access to payment transaction and financial market infrastructure and how it will be able to use this; h.describe how to preserve the legal and economic connections between assets, liabilities and contractual relationships, thereby ensuring that only the following can be transferred:1.all claims and liabilities on the bank’s part vis-à-vis a counterparty or several counterparties that can be offset, in particular those that are subject to a netting agreement,2.secured claims and liabilities together with their collateral, and3.structured financing arrangements or comparable capital market agreements to which the bank is a party, together with all rights and obligations pertaining to them.2 As soon as the approved restructuring plan is enforceable, or in the case of a systemically important bank once the restructuring plan has been approved, all transferred assets or contractual relationships, together with all rights and obligations pertaining to them at the time of the approval of the restructuring plan, pass to the new legal entity or entities.Art. 52 Bridge bank  1 The bridge bank serves to ensure the temporary continuation of individual banking services transferred to it.2 FINMA shall grant the bridge bank a licence with a fixed term of two years. It may deviate from the licensing requirements when granting it. The licence may be extended.Chapter 432 Protecting Systems and Financial Market Infrastructure 32 Amended by Annex 2 No II 1 of the FINMA Financial Market Infrastructure Ordinance of 3 Dec. 2015, in force since 1 Jan. 2016 (AS 2015 5509). Art. 53 RepealedArt. 54 Binding nature of instructions to a central counterparty, a central custodian or a payment system  1 The following measures may restrict the legally binding nature of an instruction within the meaning of Article 89 paragraph 2 of the Financial Market Infrastructure Act of 19 June 201533 (FinMIA):a.the opening of bankruptcy proceedings under Articles 33–37g BankA; andb.protective measures under Article 26 paragraph 1 letters f–h BankA.2 In its ruling, FINMA shall expressly order the time from when the measures under paragraph 1 apply.33 SR 958.1Art. 55 Netting agreements  Netting agreements under Article 27 paragraph 1 BankA include the following in particular: a.netting provisions in bilateral agreements or in framework agreements;b.offsetting and netting provisions as well as default agreements of central counterparties, central custodians or payment systems under Article 89 paragraph 1 FinMIA34.34 SR 958.1Chapter 5 Stay on Early Termination Rights35 35 Amended by No I of the FINMA Ordinance of 9 March 2017, in force since 1 April 2017 (AS 2017 1675). Art. 5636 Contracts   1 The requirement set out in Article 12 para. 2bis of the Banking Ordinance of 30 April 201437 (BO) applies to:a.contracts for the purchase, sale, lending or repurchase agreements relating to certificated securities, uncertificated securities or intermediated securities and corresponding transactions involving indices containing these underlying assets, as well as options in relation to such underlying assets;b.contracts for the purchase and sale with future delivery, lending or repurchase agreements relating to commodities and corresponding transactions involving indices containing these underlying assets, as well as options in relation to such underlying assets;c.contracts for the purchase, sale or transfer of commodities, services, rights or interest at a future date and at a predetermined price (futures contracts);d.contracts for swap transactions relating to interest, foreign exchange, currencies and commodities as well as to certificated securities, uncertificated securities, intermediated securities, the weather, emissions or inflation, and corresponding transactions involving indices containing these underlyings, including credit derivatives and interest rate options; e.interbank borrowing agreements;f.other contracts with the same effect as those listed under letters a–e;g.contracts in accordance with letters a-f in the form of master agreements;h.contracts in accordance with letters a-g entered into by foreign group entities guaranteed or otherwise secured by a bank or securities firm domiciled in Switzerland.2 The requirement set out in Article 12 para. 2bis BO does not apply to:a.contracts which provide for the termination or exercise of rights pursuant to Article 30a para. 1 BA which are neither directly nor indirectly triggered by actions taken by FINMA in accordance with the eleventh section of the Banking Act;b.contracts which are concluded or settled directly or indirectly through a financial market infrastructure or organised trading facility;c.contracts with central banks;d.contracts of group entities which are not active in the financial services sector;e.contracts with counterparties that are not companies within the meaning of Article 77 of the Financial Market Infrastructure Ordinance of 25 November 201538;f.contracts relating to the placement of financial instruments in the market;g.amendments to existing contracts which become effective pursuant to their terms and conditions and without further action by the parties.36 Amended by No I of the FINMA Ordinance of 9 March 2017, in force since 1 April 2017 (AS 2017 1675).37 SR 952.0238 SR 958.11Art. 5739 39 Repealed by Annex 2 No II 1 of the FINMA Financial Market Infrastructure Ordinance of 3 Dec. 2015, with effect from 1 Jan. 2016 (AS 2015 5509).Chapter 6 Completion of Proceedings  Art. 58 Concluding report  1 The bankruptcy liquidator or the restructuring agent shall report to FINMA, summarising the progress of the bankruptcy proceedings or the restructuring proceedings.2 The bankruptcy liquidator’s concluding report shall also contain the following information:a. details of the completion of all processes relating to the calculation of the assets and liabilities;b. details of the status of the legal claims assigned to creditors under Article 260 DEBA40; andc. a list of the shares not yet paid out as well as the segregated custody assets not yet surrendered, complete with an explanation as to why no payout or surrender has been possible to date.3 FINMA shall give public notice that the bankruptcy proceedings or the restructuring proceedings have been completed.40 SR 281.1Art. 59 Document archiving  1 FINMA shall determine how the insolvency and business documentation is to be archived following completion of the bankruptcy proceedings or the restructuring proceedings.2 The insolvency documentation and the remaining business documentation shall be destroyed on FINMA’s instructions 10 years after completion of the bankruptcy proceedings or the restructuring proceedings.3 Any special legislation providing otherwise for the archiving of individual documents applies notwithstanding.Chapter 7 Final Provisions  Art. 60 Repeal and amendment of prior legislation  1 The FINMA Bankruptcy Ordinance of 30 June 200541 is repealed.2 ...4241  [AS 2005 3539, 2008 5613 No I 3, 2009 1769]42 The amendment may be consulted under AS 2012 5573.Art. 61 Transitional provisions  The provisions of this Ordinance apply to proceedings pending in court when this Ordinance comes into force.Art. 61a43 Transitional provisions to the amendment of 9 March 2017  1 The requirements set out in Article 12 para. 2bis BO44 in conjunction with Article 56 must be met: a.within twelve months of this amendment coming into effect for the conclusion or amendment of contracts with banks and securities firms or with counterparties who would qualify as such if they were domiciled in Switzerland;b.within 18 months of this amendment coming into effect for the conclusion or amendment of contracts with other counterparties.2 FINMA may extend the implementation deadline for individual institutions where this is justified.43 Inserted by No I of the FINMA Ordinance of 9 March 2017, in force since 1 April 2017 (AS 2017 1675).44 SR 952.02Art. 62 Commencement  This Ordinance comes into force on 1 November 2012.


text: 954.1English is not an official language of the Swiss Confederation. This translation is provided for information purposes only, has no legal force and may not be relied on in legal proceedings.Federal Act on Financial Institutions(Financial Institutions Act, FinIA)of 15 June 2018 (Status as of 1 August 2021)The Federal Assembly of the Swiss Confederation,based on Articles 95 and 98 paragraphs 1 and 2 of the Federal Constitution1,and having considered the Federal Council Dispatch of 4 November 20152,decrees:1 SR 1012 BBl 2015 8901Chapter 1 General Provisions  Section 1 Subject Matter, Purpose and Scope of Application  Art. 1 Subject matter and purpose  1 This Act governs the requirements for acting as a financial institution.2 Its purpose is to protect the investors and clients of financial institutions and ensure the proper functioning of the financial market.Art. 2 Scope of application  1 Financial institutions within the meaning of this Act are as follows, irrespective of their legal form:a. portfolio managers (Article 17 paragraph 1); b. trustees (Article 17 paragraph 2);c. managers of collective assets (Article 24);d. fund management companies (Article 32);e. securities firms (Article 41).2 This Act does not apply to: a. persons who manage solely the assets of persons with whom they have business or family ties;b. persons who manage assets solely within the context of employee participation schemes;c. lawyers, notaries and their auxiliaries insofar as their activity is subject to professional confidentiality in accordance with Article 321 of the Swiss Criminal Code3 or Article 13 of the Lawyers Act of 23 June 20004, as well as the legal entities into which these persons are organised;d. persons who manage assets within the framework of a legally regulated mandate;e. the Swiss National Bank and the Bank for International Settlements;f. occupational pension schemes and other occupational pension institutions (occupational pension schemes), employer-sponsored foundations (employer-sponsored welfare funds); employers who manage the assets of their occupational pension schemes; employer and employee associations which manage the assets of their association schemes;g. social security institutions and compensation funds;h. insurance companies as defined in the Insurance Supervision Act of 17 December 20045;i public insurance institutions in accordance with Article 67 paragraph 1 of the Federal Act of 25 June 19826 on Occupational Old Age, Survivors' and Invalidity Pension Provision;j. banks pursuant to the Banking Act of 8 November 19347 (BankA). 3 SR 311.04 SR 935.615 SR 961.016 SR 831.407 SR 952.0Art. 3 Commerciality  Within the meaning of the present Act, the criterion of a commercial basis is deemed satisfied by an independent economic activity pursued on a permanent, for-profit basis.Art. 4 Group parent companies and significant group companies  1 The following are subject to the insolvency law measures under Article 67 paragraph 1 provided they are not subject to the bankruptcy jurisdiction of the Swiss Financial Market Supervisory Authority (FINMA) within the scope of the supervision of the individual institution:a. group parent companies of a financial group or financial conglomerate which have their registered office in Switzerland;b. those group companies which have their registered office in Switzerland and perform significant functions for activities which require authorisation (significant group companies).2 The Federal Council shall set the criteria for assessing significance.3 FINMA shall identify significant group companies and keep a publicly accessible list of said companies.Section 2 Common Provisions  Art. 5 Duty to obtain authorisation  1 Financial institutions under Article 2 paragraph 1 require authorisation from FINMA. 2 They may be entered in the commercial register only after authorisation has been granted.3 Financial institutions in accordance with Article 2 paragraph 1 letter c that are already subject to other equivalent official supervision in Switzerland are exempt from the duty to obtain authorisation.Art. 6 Authorisation chain  1 Authorisation to operate as a bank within the meaning of the BankA8 also authorises an entity to operate as a securities firm, a manager of collective assets, a portfolio manager and a trustee.2 Authorisation to operate as a securities firm under Article 41 letter a also authorises an entity to operate as a manager of collective assets, a portfolio manager and a trustee.93 Authorisation to operate as a fund management company also authorises an entity to operate as a manager of collective assets and a portfolio manager.4 Authorisation to operate as a manager of collective assets also authorises an entity to operate as a portfolio manager. 8 SR 952.09 Amended by No I 7 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Aug. 2021 (AS 2021 33, 399; BBl 2020 233).Art. 7 Authorisation conditions  1 Any party that meets the conditions set out in this section and the specific conditions that apply to individual financial institutions is entitled to authorisation.2 Portfolio managers and trustees submitting an application for authorisation are required to provide proof that they are subject to supervision by a supervisory organisation in accordance with Article 43a of the Financial Market Supervision Act of 22 June 200710 (FINMASA).3 The Federal Council may define additional authorisation conditions if this is necessary for implementing recognised international standards.10 SR 956.1Art. 8 Change in facts  1 The financial institution shall notify FINMA of any changes in the facts on which its authorisation is based. 2 If the changes are of material significance, the financial institution must obtain prior authorisation from the supervisory authority in order to pursue its activity.Art. 9 Organisation  1 The financial institution must establish appropriate corporate management rules and be organised in such a way that it can fulfil its statutory duties. 2 It shall identify, measure, control and monitor its risks, including legal and reputational risks, and organise effective internal controls. 3 The Federal Council shall set the minimum organisational requirements to be satisfied by financial institutions, taking into account their different business activities and sizes as well as the risks.Art. 10 Place of management  1 The financial institution must effectively be managed from Switzerland. General directives and decisions within the context of group supervision are excluded if the financial institution forms part of a financial group that is subject to appropriate consolidated supervision by foreign supervisory authorities.2 The persons entrusted with managing the financial institution must be resident in a place from which they may effectively exercise such management.Art. 11 Guarantee of irreproachable business conduct  1 The financial institution and the persons responsible for its administration and management must provide a guarantee of irreproachable business conduct.2 Moreover, the persons responsible for the administration and management of the financial institution must enjoy a good reputation and have the specialist qualifications required for their functions. 3 Qualified participants in a financial institution must also enjoy a good reputation and ensure that their influence is not detrimental to prudent and sound business activity.4 Persons who directly or indirectly hold at least 10% of the share capital or votes or who can significantly influence its business activity in another manner are deemed to be qualified participants in a financial institution.5 Each person must notify FINMA before directly or indirectly acquiring or disposing of a qualified participation in accordance with paragraph 4 in a financial institution. This mandatory notification also applies if a qualified participation is increased or reduced in such a way as to reach, exceed or fall below the thresholds of 20%, 33% or 50% of the share capital or votes.6 The financial institution shall notify FINMA of the persons who meet the conditions of paragraph 5 as soon as it becomes aware of the same.7 Portfolio managers and trustees are exempt from the requirements of paragraphs 5 and 6.8 Qualified participants in portfolio managers and trustees are permitted to perform management dutiesArt. 12 Public offer of securities on the primary market  Persons operating primarily in the financial sector may perform the following activities only if they have authorisation as a securities firm as defined in this Act or as a bank in accordance with the BankA11:a. underwriting securities issued by third parties and offering these to the public on a primary market on a commercial basis; b. creating derivatives in the form of securities and offering these to the public on the primary market on a commercial basis.11 SR 952.0Art. 13 Protection against confusion and deception  1 The name of the financial institution must not lead to confusion or deception.2 The terms «portfolio manager», «trustee», «manager of collective assets», «fund management company» or «securities firm» may be used, alone or in compound terms, in the company name, in the description of its business purpose or in commercial documents only if the corresponding authorisation has been obtained. The foregoing is without prejudice to Article 52 paragraph 3 and Article 58 paragraph 3.Art. 14 Delegation of tasks  1 Financial institutions may delegate a task solely to third parties that possess the necessary skills, knowledge and experience and that have the required authorisations. They shall carefully instruct and supervise the appointed third parties.2 FINMA may make the delegation of investment decisions to a person located abroad subject to an agreement on cooperation and information exchange between FINMA and the competent foreign supervisory authority, in particular if such an agreement is required under the other country's legislation.Art. 15 International business  A financial institution must notify FINMA before: a. establishing, acquiring or closing a foreign subsidiary, branch or representation;b. acquiring or surrendering a qualified participation in a foreign company.Art. 1612 Ombudsman  Financial institutions that provide financial services under Article 3 letter c of the Financial Services Act of 15 June 201813 (FinSA) must affiliate to an ombudsman as stipulated in the provisions of Title 5 of the FinSA at the latest on assuming their activity.12 Amended by No I 7 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 950.1Chapter 2 Financial Institutions  Section 1 Portfolio Managers and Trustees  Art. 17 Definitions  1 A portfolio manager is a person mandated to manage assets on a commercial basis in the name of and on behalf of clients within the meaning of Article 3 letter c items 1 to 4 FinSA14. 2 A trustee is a person who on a commercial basis manages or holds a separate fund for the benefit of the beneficiaries or for a specified purpose based on the instrument creating a trust within the meaning of the Hague Convention of 1 July 198515 on the Law Applicable to Trusts and on their Recognition.14 SR 950.115 SR 0.221.371Art. 18 Legal form  1 Portfolio managers and trustees which have their registered office or place of residence in Switzerland must have one of the following legal forms: a. sole proprietorship; b. commercial enterprise;c. cooperative.2 Portfolio managers and trustees must be listed in the commercial register. Art. 19 Tasks  1 The portfolio manager manages individual portfolios.2 The trustee manages the separate fund, ensures its value is maintained and employs it for the specified purposes.3 Portfolio managers and trustees may also provide the following services in particular:a. investment advice;b. portfolio analysis;c. offering of financial instruments.Art. 20 Qualified managers  1 The management body of a portfolio manager or trustee entity must consist of at least two qualified persons. 2 The management body may consist of only one qualified person subject to proof that continuation of business operations on a going concern basis is guaranteed. 3 A person is deemed qualified to manage business operations if they have received appropriate training in the activities of a portfolio manager or trustee and at the time of assuming management duties has had sufficient professional experience in portfolio management for third parties or within the framework of trusts. The Federal Council shall regulate the details. Art. 21 Risk management and internal control  1 Portfolio managers and trustees must have an appropriately defined risk management system in place as well as an effective internal control structure to ensure, among other requirements, compliance with legal and internal provisions.2 The tasks of risk management and internal control may be carried out by a qualified manager or delegated to one or more suitably qualified employees or to a qualified external entity.3 Persons who carry out the tasks of risk management and internal control may not be involved in the activities which they supervise.Art. 22 Minimum capital and collateral  1 The minimum capital of portfolio managers and trustees must amount to CHF 100,000 and be paid up in cash. The minimum capital requirement must be complied with at all times.2 Portfolio managers and trustees must have adequate collateral or take out professional liability insurance. 3 The Federal Council shall set the amount of collateral and the sum to be insured under professional liability insurance. Art. 23 Own funds  1 Portfolio managers and trustees must have sufficient own funds.2 Own funds must at all times amount to at least one quarter of the fixed costs reported in the most recent annual financial statement and no more than CHF 10 million. Section 2 Managers of Collective Assets  Art. 24 Definition  1 A manager of collective assets is a person who manages assets on a commercial basis in the name and on behalf of:a. collective investment schemes;b. occupational pension schemes. 2 Portfolio managers within the meaning of Article 17 paragraph 1 are:a. Managers of collective assets in accordance with paragraph 1 letter a whose investors are qualified within the meaning of Article 10 paragraph 3 or 3ter of the Collective Investment Schemes Act of 23 June 200616 and fulfil one of the following conditions:1. The assets of collective investment schemes under their management, including the assets acquired through the use of leveraged finance, amount in total to no more than CHF 100 million.2. The assets of collective investment schemes under their management do not exceed CHF 500 million in total and do not include leveraged financial instruments. The collective investment schemes give no right to redemption in the first five years after making the first investment.b. Managers of collective assets in accordance with paragraph 1 letter b who manage the assets of occupational pension schemes totalling no more than CHF 100 million and in the mandatory segment manage no more than 20% of the assets of an individual occupational pension scheme.3 Portfolio managers in accordance with paragraph 2 may request authorisation as managers of collective assets provided this is required by the state where the collective investment scheme is established or offered or where the occupational pension scheme is managed. The Federal Council shall regulate the details.16 SR 951.31Art. 25 Legal form  Managers of collective assets who have their registered office in Switzerland must have the legal form of a commercial enterprise.Art. 26 Tasks  1 Managers of collective assets are responsible for the portfolio and risk management of the assets entrusted to them.2 In addition, managers of collective assets may conduct fund business, in particular, for foreign collective investment schemes. If the foreign country's law requires an agreement on cooperation and information exchange between FINMA and the foreign supervisory authorities of relevance for the fund business, they may perform this business only where such an agreement exists.3 Managers of collective assets may also perform administrative activities within the scope of these tasks.Art. 27 Delegation of tasks  1 Managers of collective assets may delegate tasks to third parties, provided this is in the interests of efficient management.2 Any person who delegates the management of the assets of an occupational pension scheme or collective investment scheme to a manager of collective assets remains responsible for adhering to the relevant investment guidelines.Art. 28 Minimum capital and collateral  1 Managers of collective assets must possess the required minimum capital. This must be fully paid up.2 FINMA may permit managers of collective assets in the form of partnerships to provide appropriate collateral instead of minimum capital.3 The Federal Council shall regulate the amount of the minimum capital and of the collateral. It may furthermore make the granting of authorisation contingent upon possession of professional liability insurance. Art. 29 Own funds  1 Managers of collective assets must possess an appropriate level of own funds.2 The Federal Council shall set the amount of own funds based on the business activity and the risks.Art. 30 Group and conglomerate supervision  Where a financial group is dominated by a manager of collective assets or a financial conglomerate is dominated by a manager of collective assets, FINMA may make these subject to group or conglomerate supervision, provided this is in accordance with recognised international standards.Art. 31 Change of manager of collective assets  A manager of collective assets shall give advance notice of the assumption of its rights and obligations by another manager of collective assets to the relevant supervisory authority for the collective investment scheme or occupational pension scheme. Section 3 Fund Management Companies  Art. 32 Definition  A fund management company is an entity that manages investment funds independently in its own name and for the account of investors.Art. 33 Legal form and organisation  1 The fund management company must be a company limited by shares that has its registered office and head office in Switzerland.2 The share capital shall be divided into registered shares.3 The persons managing the fund management company and the custodian bank must be independent of each other's company.4 The main purpose of the fund management company is to conduct the fund business; this consists of the offering of units in the investment fund and its management and administration.Art. 34 Tasks  In addition to conducting activities in accordance with the present Act, the fund management company may perform the following other services, in particular:a. the safekeeping and technical management of collective investment schemes;b. the administration of an investment company with variable capital (SICAV).Art. 35 Delegation of tasks  1 The fund management company may not delegate the management of the investment fund to third parties. However, it may delegate investment decisions as well as specific tasks to third parties, provided this is in the interests of efficient management.2 In the case of collective investment schemes for which the facilitated offering of shares exists in the European Union based on a treaty, investment decisions may not be delegated to either the custodian bank or any other companies whose interests may conflict with those of the manager of collective assets or the fund management company or the investors.Art. 36 Minimum capital  1 The fund management company must possess the required minimum capital. This must be fully paid up.2 The Federal Council shall regulate the amount of the minimum capital. Art. 37 Own funds  1 There must be an appropriate ratio between the fund management company's own funds and the overall assets of the collective investment schemes under its management. The Federal Council shall specify this ratio.2 In special cases, FINMA may ease the requirements, provided this does not adversely affect the protective purpose of this Act, or it may order more stringent requirements.3 The fund management company may not invest the prescribed level of its own funds in fund units that it has issued itself or lend its own funds to its shareholders or any natural or legal person with whom they have business or family ties. The holding of liquid funds with the custodian bank shall not constitute a loan.Art. 38 Rights  1 The fund management company is entitled to:a. receive the fees stipulated in the fund contract;b. an exemption from any liabilities which may have arisen in the course of the proper execution of its tasks;c. receive reimbursement of the expenses incurred in connection with such liabilities.2 These payments are made from the assets of the investment fund. Investors are not held personally liable.Art. 39 Change of fund management company  1 The rights and duties of the fund management company may be transferred to another fund management company.2 In order to be effective, the transfer agreement between the outgoing and incoming fund management company must be made in writing or in another form demonstrable via text and must have the consent of the custodian bank and the approval of FINMA.3 Prior to approval by FINMA, the outgoing fund management company shall publish the proposed transfer in the publication media.4 The investors must be informed in these publications of their right to lodge objections with FINMA within 30 days of publication. The procedure is based on the Administrative Procedure Act of 20 December 196817.5 FINMA shall approve the change of fund management company if the legal requirements are met and the continuation of the investment fund is in the interest of the investors.6 It shall publish the decision in the publication media.17 SR 172.021Art. 40 Segregation of the fund assets  1 In the event of the bankruptcy of the fund management company, assets and rights belonging to the investment fund shall be segregated in favour of the investors. The foregoing is without prejudice to the fund management company's claims under Article 38.2 Debts incurred by the fund management company that do not result from the fund contract may not be set off against claims belonging to the investment fund.Section 4 Securities Firms  Art. 41 Definition  A securities firm is an entity that, on a commercial basis:a. trades in securities in its own name for the account of clients;b. trades in securities for its own account on a short-term basis, operates primarily on the financial market and: 1. could thereby jeopardise the proper functioning of the financial market, or2. is a member of a trading venue, or3.18 operates an organised trading facility under Article 42 of the Financial Market Infrastructure Act of 19 June 201519; orc. trades in securities for its own account on a short-term basis and publicly quotes prices for individual securities upon request or on an ongoing basis (market maker). 18 Inserted by No I 7 of the FA of 26 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Aug. 2021 (AS 2021 33, 399; BBl 2020 233).19 SR 958.1Art. 42 Legal form  A securities firm that has its registered office in Switzerland must have the legal form of a commercial enterprise.Art. 43 Foreign-controlled securities firms  The provisions of the BankA20 on foreign-controlled banks apply by analogy.20 SR 952.0Art. 44 Tasks  1 In particular, the securities firm may:a. hold accounts for settling securities trade within the context of its activity under Article 41 for clients, either itself or with third parties; b. act as custodian of clients' securities, either itself or in its own name with third parties; c. underwrite securities issued by third parties as a firm commitment or on commission and offer these to the public on the primary market on a commercial basis; d. create derivatives itself on a commercial basis, which it offers to the public on the primary market on its own behalf or that of another party. 2 It may accept deposits from the public on a commercial basis within the context of its activity under paragraph 1 letter a. 3 The Federal Council may regulate the use of deposits from the public.Art. 45 Minimum capital and collateral   1 Securities firms must possess the required minimum capital. This must be fully paid up.2 FINMA may permit securities firms in the form of partnerships to post appropriate collateral instead of the minimum capital.3 The Federal Council shall regulate the amount of the minimum capital and of the collateral.Art. 46  Own funds, liquidity and risk diversification  1 Securities firms must have sufficient own funds and liquidity individually and on a consolidated basis. 2 They must diversify their risks appropriately. 3 The Federal Council shall regulate the risk diversification requirements. It shall set the amount of own funds and liquidity based on the business activity and the risks. 4 Where there are legitimate grounds for so doing, FINMA may ease the requirements, provided this does not adversely affect the protective purpose of the law, or it may order more stringent requirements.5 FINMA may issue implementing regulations. Art. 47 Additional capital  The provisions of the BankA21 on additional capital apply by analogy.21 SR 952.0Art. 48 Accounting  The provisions of the BankA22 on accounting apply by analogy.22 SR 952.0Art. 49 Group and conglomerate supervision  1 Two or more companies are deemed to be a financial group dominated by a securities firm if:a. at least one of them operates as a securities firm;b. they operate primarily in the financial sector; andc. they form an economic unit or other circumstances suggest that one or more of the companies under individual supervision is de jure or de facto obliged to provide assistance to group companies.2 A financial conglomerate dominated by a securities firm is a financial group as defined in paragraph 1 operating primarily in the field of securities trading and comprising at least one insurance company of considerable economic significance.3 The provisions of the BankA23 on financial groups and financial conglomerates apply by analogy.23 SR 952.0Art. 50 Record-keeping duty  The securities firm must keep a record of the orders and transactions it conducts together with all the details necessary for their traceability and for the supervision of its activity.Art. 51 Reporting duty  1 The securities firm must report all of the information necessary for transparent securities trading.2 FINMA shall regulate which information is to be reported to whom and in what form.3 Provided this is required for the purposes of the Act, the Federal Council may also impose the reporting duty in accordance with paragraph 1 on persons and companies that buy and sell securities on a commercial basis but without the involvement of a securities firm. Any such company must instruct an audit firm licensed by the Federal Audit Oversight Authority (FAOA) in accordance with Article 9a paragraph 1 of the Auditor Oversight Act of 16 December 200524 (AOA) to audit compliance with this reporting duty and must inform FINMA.24 SR 221.302Section 5 Branches  Art. 52 Duty to obtain authorisation  1 Authorisation from FINMA is required by financial institutions that have their registered office abroad (foreign financial institutions) and that wish to establish a branch in Switzerland that employs persons who perform any of the following activities in the name of the foreign financial institution on a permanent commercial basis in Switzerland or from Switzerland:a. asset management or trustee activities;b. portfolio management for collective investment schemes or occupational pension schemes;c. securities trading;d. conclusion of transactions; or e. client account management.2 Foreign fund management companies may not establish branches in Switzerland. 3 The Federal Council may sign international treaties allowing financial institutions from the treaty states to open a branch without requiring authorisation from FINMA if both sides recognise the equivalent nature of the respective regulation of financial institutions' activity and the supervisory measures.Art. 53 Authorisation conditions  FINMA shall grant the foreign financial institution authorisation to establish a branch if:a. the foreign financial institution:1. is sufficiently organised and has adequate financial resources and qualified personnel to operate a branch in Switzerland,2. is subject to appropriate supervision that includes the branch, and3. proves that the business name of the branch can be entered in the commercial register;b. the competent foreign supervisory authorities:1. do not raise any objections to the establishment of a branch,2. undertake to notify FINMA immediately if any circumstances arise that could seriously prejudice the interests of the investors or clients, and3. provide FINMA with administrative assistance;c. the branch: 1. fulfils the conditions set out in Articles 9 to 11 and has a set of regulations that accurately describes the scope of business and provides for an administrative or operational organisation corresponding to its business activity, and2. fulfils the additional authorisation conditions under Articles 54 to 57.Art. 54 Requirement of reciprocity  FINMA may make the granting of authorisation to establish a branch of a foreign financial institution additionally contingent upon a guarantee of reciprocity with the states in which the foreign financial institution or the foreigners with qualified participations have their place of residence or registered office. Art. 55 Financial groups and financial conglomerates  Where a foreign financial institution is part of a financial group or financial conglomerate, FINMA may make the granting of authorisation contingent upon it being subject to appropriate consolidated supervision by foreign supervisory authorities.Art. 56  Collateral  FINMA may make the granting of authorisation to establish a branch of a foreign portfolio manager, a foreign trustee or a foreign manager of collective assets additionally contingent upon the posting of collateral if so required for the protection of investors or clients.Art. 57 Exemptions  The Federal Council may make provision for exempting branches of foreign financial institutions from certain provisions of this Act. Section 6 Representations  Art. 58 Duty to obtain authorisation  1 Foreign financial institutions require authorisation from FINMA if they employ persons in Switzerland who work for them on a permanent and commercial basis in Switzerland or from Switzerland in another manner than that set out in Article 52 paragraph 1, specifically where these persons forward client orders to them or represent them for marketing or other purposes.2 Foreign fund management companies may not establish representations in Switzerland. 3 The Federal Council may sign international treaties allowing financial institutions from the treaty states to open a representation without requiring authorisation from FINMA if both sides recognise the equivalent nature of the respective regulation of financial institutions' activity and the supervisory measures.Art. 59 Authorisation conditions  1 FINMA shall grant the foreign financial institution authorisation to establish a representation if:a. the foreign financial institution is subject to appropriate supervision;b. the competent foreign supervisory authorities do not raise any objections to the establishment of the representation;c. the persons entrusted with its management provide a guarantee of irreproachable business conduct.2 FINMA may make authorisation additionally contingent upon the granting of reciprocity by the state in which the foreign financial institution has its registered office.Art. 60 Exemptions  The Federal Council may make provision for exempting representations of foreign financial institutions from certain provisions of this Act.Chapter 3 Supervision  Art. 61 Competence  1 Portfolio managers and trustees are supervised by FINMA in consultation with a supervisory organisation under FINMASA25, subject to consolidated supervision by FINMA in accordance with Articles 30 and 49 of the present Act or Article 1 paragraph 1 FINMASA.2 Ongoing supervision of portfolio managers and trustees will be performed by FINMA-approved supervisory organisations.3 Managers of collective assets, fund management companies and securities firms are supervised by FINMA.4 Where no supervisory organisation exists in accordance with paragraph 1, supervision is performed by FINMA. 25 SR 956.1Art. 62 Auditing of portfolio managers and trustees  1 Portfolio managers and trustees must appoint an audit firm in accordance with Article 43k paragraph 1 FINMASA26 to perform an annual audit, provided that this audit is not conducted by the respective supervisory organisation itself.2 The supervisory organisation may increase the audit frequency to a maximum of four years taking account of the activity of those supervised and the associated risks.3 In the years without a periodic audit, portfolio managers and trustees shall submit to the supervisory organisation a report on their business activity's compliance with the legislative provisions. This report may be delivered in a standardised format.26 SR 956.1 Art. 63 Auditing of managers of collective assets, fund management companies, securities firms, financial groups and financial conglomerates  1 The managers of collective assets, fund management companies, securities firms, financial groups and financial conglomerates must:a. appoint an audit firm licensed by the FAOA under Article 9a paragraph 1 AOA27 to carry out an annual audit under Article 24 FINMASA28;b. have their annual accounts, and if applicable their consolidated accounts, audited by an audit company subject to state oversight in accordance with the ordinary auditing principles set out in the Swiss Code of Obligations29 (CO). 2 FINMA may establish an audit frequency of several years for the audit in accordance with paragraph 1 letter a taking account of the activity of those supervised and the associated risks.3 In the years without a periodic audit, financial institutions in accordance with paragraph 1 shall submit a report to FINMA on their business activity's compliance with the legislative provisions. This report may be delivered in a standardised format.4 The fund management company shall appoint the same audit firm for itself and for the investment funds it manages. 5 FINMA may itself conduct audits directly.27 SR 221.30228 SR 956.129 SR 220Art. 64 Duty to provide information and to report in the case of delegation of significant functions  1 If a financial institution delegates significant functions to other persons, these shall be subject to the duty to provide information and to report in accordance with Article 29 FINMASA30.2 FINMA may conduct audits of these persons at any time.30 SR 956.1Art. 65 Suspension of voting rights  In order to enforce Article 11 paragraphs 3 and 5, FINMA may suspend the voting rights attached to equities or shares held by qualified participants.Art. 66  Liquidation  1 If FINMA withdraws authorisation from a financial institution, this shall result in liquidation in the case of legal entities and general and limited partnerships and in deletion from the commercial register in the case of sole proprietorships. 2 FINMA shall designate the liquidator and oversee its activity. 3 The provisions under insolvency law are reserved.Art. 67 Measures under insolvency law  1 The provisions of the BankA31 on measures in case of the risk of insolvency and bankruptcy apply by analogy to fund management companies and securities firms.2 The provisions of the BankA on the protection of deposits and dormant assets apply by analogy to securities firms under Article 41 letter a.3231 SR 952.032 Amended by No I 7 of the FA of 25 Sept. 2020 on the Adaptation of Federal Law to Developments in Distributed Ledger Technology, in force since 1 Aug. 2021 (AS 2021 33, 399; BBl 2020 233).Chapter 4 Liability and Criminal Law Provisions  Section 1 Liability  Art. 68 1 The liability of the financial institutions and their bodies is based on the provisions of the CO33.2 Where a financial institution delegates performance of a task to a third party, it remains liable for any losses caused by the latter unless it proves that it took the due care required in that party's selection, instruction and monitoring. The Federal Council may set out the requirements for such monitoring.3 The fund management company remains liable for the actions of persons to whom it has delegated tasks in accordance with Article 35 paragraph 1 as if it had performed those tasks itself.33 SR 220Section 2 Criminal Provisions  Art. 69 Violation of professional confidentiality  1 A custodial sentence not exceeding three years or a monetary penalty shall be imposed on any person who wilfully:a. discloses a secret entrusted to them in their capacity as a director or officer, employee, agent or liquidator of a financial institution or of which they have become aware in said capacity;b.  attempts to induce a violation of professional secrecy;c. discloses to other persons a secret disclosed to them in violation of letter a or exploits such a secret for their own benefit or for the benefit of others.2 A custodial sentence not exceeding five years or a monetary penalty shall be imposed on any person who obtains a pecuniary advantage for themselves or another person through an action as detailed in paragraph 1 letter a or c.3 A fine not exceeding CHF 250,000 shall be imposed on persons who commit the foregoing acts through negligence.4 Any person who violates professional confidentiality remains liable to prosecution after termination of the official or employment relationship or exercise of the profession.5 The federal and cantonal provisions relating to the duty to testify and the duty to provide information to the authorities are reserved.6 The cantons are responsible for the prosecution and adjudication of acts under this provision.Art. 70 Violation of the provisions on protection against confusion and deception and notification duties  A fine not exceeding CHF 500,000 shall be imposed on any person who wilfully:a. violates the provision on protection against confusion and deception (Article 13);b. fails to provide FINMA with the prescribed notifications in accordance with Articles 11 and 15, or does so incorrectly or too late.Art. 71 Violation of the record-keeping and reporting duties  A fine not exceeding CHF 500,000 shall be imposed on any person who wilfully:a.  violates the record-keeping duty set out in Article 50;b.  violates the reporting duty in accordance with Article 51.Chapter 5 Final Provisions  Art. 72 Implementing provisions  The Federal Council shall issue the implementing provisions.Art. 73 Repeal and amendment of other legislative instruments  The repeal and amendment of other legislative instruments are set out in the Annex.Art. 74 Transitional provisions   1 Financial institutions that already possess authorisation by virtue of a financial market act pursuant to Article 1 paragraph 1 FINMASA34 for the corresponding activity at the time of this Act coming into force are not required to obtain new authorisation. They must fulfil the requirements of this Act within one year of its coming into force.2 Financial institutions that under prior law are not subject to an authorisation requirement but are newly subject to an authorisation requirement at the time of this Act coming into force shall report to FINMA within six months of this Act coming into force. They must satisfy the requirements of this Act and submit an authorisation application within three years of the Act coming into force. They may continue to perform their activity until a decision has been made concerning authorisation, provided that they are affiliated to a self-regulatory organisation in accordance with Article 24 of the Anti-Money Laundering Act of 10 October 199735 (AMLA) and are supervised by said organisation with regard to compliance with the corresponding duties.3 Portfolio managers and trustees that assume their activity within one year of this Act coming into force must report immediately to FINMA and after assuming their activity must satisfy authorisation conditions with the exception of Article 7 paragraph 2. No later than one year after FINMA has authorised a supervisory organisation in accordance with Article 43a FINMASA, they must affiliate to such an organisation and submit an application for authorisation. They may perform their activity until a decision has been made concerning authorisation, provided that they are affiliated to a self-regulatory organisation in accordance with Article 24 AMLA and are supervised by said organisation with regard to compliance with the corresponding duties.4 In special cases, FINMA may extend the deadlines under paragraphs 1 and 2.34 SR 956.135 SR 955.0Art. 74a36 Coordination with the Amendment of the Anti-Money Laundering Act within the context of the Gambling Act of 29 September 2017  ...3736 Inserted by the correction made by the Federal Assembly Drafting Committee of  24 Sept. 2019 (AS 2019 5065).37 The coordination provisions can be consulted under AS 2019 5065 and AS 2020 501. Correction by Federal Assembly Drafting Committee of 31 Jan. 2020, published on 18 Febr. 2020 (AS 2020 501).Art. 75 Referendum and commencement  1 This Act is subject to an optional referendum.2 The Federal Council will determine the commencement date.3 This Act shall only come into force with the FinSA38.4 The Federal Council may implement the following provisions early:a.  Amendments to the Federal Act of 23 March 200139 on Consumer Credit (annex No. 2);b.  Article 9a paragraph 4bis AOA40 (Annex No 3);c.  Articles 1a, 1b, 47 paragraph 1 letter a and 52a BankA41 (Annex No 14);d.  Article 2 paragraph 2 letter a AMLA42 (Annex No 15);e.  Articles 4, 5 and 15 paragraph 2 letter a FINMASA43 (Annex No 16).5 Article 15 paragraph 2 letter a FINMASA shall apply until Article 15 paragraph 2 letter abis FINMASA (Annex No 16) comes into force.Commencement date: 1 January 20204438 SR 950.139 SR 221.214.140 SR 221.30241 SR 952.042 SR 955.043 SR 956.144 O of 6 Nov. 2019 (AS 2019 4631).Annex (Art. 73)Repeal and Amendment of other Legislative Instruments IThe Stock Exchange Act of 24 March 199545 is repealedIIThe legislative instruments below are amended as follows:...4645 [AS 1997 68 2044, 2005 5269 Annex No II 7, 2006 2197 Annex No 146, 2008 5207 Annex No 16, 2012 6679 Annex No 8, 2013 1103, 2014 4073 Annex No 6, 2015 1535 No I 3 5339 Annex No 11]46 The amendments may be consulted under AS 2018 5247.