Regulation

Where empowered to do so by an act or ordinance, FINMA regulates second-order technical details in certain defined areas of supervision. It also publishes circulars which set out its supervisory practice and how it proposes to interpret laws and ordinances. FINMA promotes risk-oriented and proportional regulation.

Systemically important financial institutions can jeopardise entire economies if they suffer a disorderly failure and are therefore regarded as “too big to fail” (TBTF). The Swiss legislator promulgated special rules for the recovery and resolution of such institutions in response to the financial crisis of 2007/2008. Their comparability with the relevant international standards and the degree of implementation of these standards must be reviewed twice a year.

After UBS’s emergency takeover of CS, the Federal Council carried out an in-depth evaluation of the regulation of systemically important banks and published its report on banking stability on 10 April 2024. The report identified areas where action was needed and proposed an extensive package of measures, including key improvements to current banking regulation along with new tools and powers for FINMA.

Following on from this, on 6 June 2025 the Federal Council published parameters for the planned amendments to laws and ordinances, including implementation of the findings of the PInC report on the CS crisis. The parameters set out the Federal Council’s proposals for improvements to the “too big to fail” regime in Switzerland. The proposals include introducing an accountability regime for managers and creating the legal basis for earlier intervention by FINMA along with higher capital requirements for systemically important banks with foreign subsidiaries.

FINMA supports the parameters presented by the Federal Council. In FINMA’s view, the proposed measures represent a coordinated package that, taken together, will strengthen banks’ resilience in a crisis and thus bolster the stability of the financial system. FINMA again contributed its expertise to working groups in the federal government on implementing these measures in 2025.
 

Under the Ordinance to the Financial Market Supervision Act, FINMA was obliged to review the format compliance of its regulation by the end of January 2025 and amend it if necessary. This review has been completed, and the final changes in format from circular to ordinance are expected to enter into force on 1 January 2027.

In order to ensure format compliance, FINMA is transferring Circular 2019/1 “Risk diversification – banks” and 2013/7 “Limits on intra-group positions – banks” into a new FINMA ordinance. FINMA launched the consultation on the Ordinance on 3 July 2025. The transfer to ordinance level is only expected to lead to a small number of substantive changes, including the use of the final Basel III standardised approach for market risk to measure trading book positions and the treatment of guarantees by foreign group companies. The new RDO-FINMA is due to enter into force on 1 January 2027. 

FINMA is also transferring Circular 2015/2 “Liquidity risks – banks” to a new FINMA ordinance for reasons of format compliance. The consultation on the Ordinance opened on 3 July 2025. The transfer is only expected to lead to a few substantive changes, such as the provisions on liquidity and financial planning, which were not mentioned in the Circular. The Ordinance also contains provisions on the obligation of companies to share information if a liquidity shortage is imminent or one has already occurred, as proposed by the Federal Council. The FINMA Liquidity Ordinance is due to enter into force on 1 January 2027.

FINMA opened the consultation on the partial revision of Circular 2016/7 “Video and online identification” on 5 November 2025. The Circular sets out FINMA’s supervisory practice with regard to due diligence obligations when initiating a business relationship via digital channels and is periodically updated in line with technological changes. The revision is intended to enable the use of e-IDs in client identification in particular. The revised Circular is due to enter into force in the third quarter of 2026.

The new Circular 2025/4 “Consolidated supervision of financial groups under the BA and FinIA” entered into force on 1 July 2025. The main aim of consolidated supervision is to ensure that supervisors have an overview of all the risks incurred by a financial group. FINMA has developed an established supervisory practice in this area over many years based on case-by-case decisions, which will now be codified in the Circular and made accessible to all affected supervised institutions. 

To better protect investors in collective investment schemes from financial and liquidity crises, the Financial Stability Board (FSB) and International Organisation of Securities Commissions (IOSCO) have revised their recommendations on liquidity management and produced new recommendations in recent years (see IOSCO Revised Recommendations for Liquidity Risk Management for Collective Investment Schemes of 26 May 2025 and FSB Revised Policy Recommendations to Address Structural Vulnerabilities from Liquidity Mismatch in Open-Ended Funds of 20 December 2023).

The aim is to strengthen investment funds’ resilience to liquidity risks. The new standards raise the requirements for liquidity management by investment funds and require the fund or its management company to take specific action depending on the liquidity of the investments (categorisation approach). In addition, they require the management company to implement further liquidity measures. Switzerland must now review the regulatory implementation of the standards. In its Financial Sector Assessment Program (FSAP) report on Switzerland, the International Monetary Fund emphasises the importance of implementing the FSB and IOSCO recommendations on liquidity as a priority.

After the launch of an ordinance or circular, FINMA reviews its impact. To this end, it consults the relevant groups and publishes the results of the review in an ex-post evaluation report.

FINMA carried out an ex-post evaluation of its Circular “Interest rate risks – banks” in 2025. This involved reviewing whether the provisions in the Circular on the measurement, management, monitoring and control of interest rate risks in the banking book are necessary, appropriate and effective. The evaluation report on the Circular was published on 26 November 2025.

FINMA supports self-regulation, defined as the regulation of the financial markets by the financial market participants or private sector trade associations within the statutory framework in accordance the Financial Market Supervision Act (FINMASA).

FINMA’s ordinances and circulars were reduced in scale in 2025 in terms of the number of pages. The number of pages in circulars fell to 532 (2024: 867). However, the number of pages in FINMA ordinances rose by just under 300. The changes are due to the entry into force of the FINMA ordinances implementing the final Basel III standards, as well as the new FINMA ordinances on regulatory audit and insolvency procedures for financial institutions.