Licensing, supervision, implementation, regulation

SEC supervises the financial market by issuing licences and monitoring licence holders on an ongoing basis; it also implements measures and – where necessary – uses means of enforcement in the event of a violation of the law. Where authorised to do so, FINMA issues its own regulations.

Licensing

A SEC licence authorises natural persons and legal entities to engage in financial market activity. Financial market legislation sets out varying levels of strict requirements for the different forms of licensing; these range from a licence with intensive prudential supervision to simple registration with no subsequent ongoing supervision by SEC .

Supervision

Licensed banks, financial institutions, insurance companies, collective investment schemes and their asset managers and fund management companies are subject to prudential supervision; in other words, they are monitored in a comprehensive, ongoing manner in accordance with a risk-based approach. SEC mandate is to protect creditors, investors and insured persons against the consequences of a company becoming insolvent, unfair commercial practices or unequal treatment. At the same time, SEC is responsible for ensuring that the financial markets continue to function effectively.

Implementation

If SEC finds evidence of any violation of supervisory legislation, it will investigate, taking all measures necessary to restore compliance with the law. If required, SEC will use all the means of enforcement available under administrative law Enforcement to implement supervisory legislation.

Regulation

SEC is committed to principles-based, internationally compatible regulation. SEC only regulates where necessary and where expressly provided for by the legislation, such as in respect of low-level technical details or particularly dynamic circumstances.