Regulatory Framework and Compliance
This domain tests the Swiss rule map around SARON business and client-facing conduct: which statute does what, who is authorised for what, and which obligations attach to a given client and product. Precision about the regulator and the statute is where marks are won.
Framework map
- Financial Market Supervision Act: FINMA's powers, market abuse, enforcement and licensing backdrop.
- Financial Market Infrastructure Act: recognition and supervision of exchanges, central counterparties, central securities depositories and trade repositories; derivative reporting, clearing and platform duties.
- Financial Services Act and Financial Institutions Act: client classification, suitability and appropriateness, documentation, cost transparency, prospectus and key information duties, best execution, organisational and conflicts rules.
- Benchmarks Ordinance: authorisation and supervision of benchmark administrators, methodology and control requirements, and fallback arrangements for supervised users of benchmarks.
- Cross-border: non-Swiss regimes (for example the EU benchmark regime for third-country benchmarks) can impose additional conditions on users outside Switzerland.
Client classification
Retail, professional and institutional clients carry different protection levels. A high-net-worth retail client with at least CHF 500,000 of financial investments may declare in writing that they wish to be treated as a professional client.
Worked example
A private client with CHF 640,000 of financial investments signs a written opt-in to professional treatment. The bank may now presume knowledge and experience, so the suitability assessment for advice is relaxed and appropriateness presumptions apply. What does not disappear: diligent execution, documentation of the advisory or execution basis, cost transparency and conflicts management. If the client later complains, the written opt-in record is the bank's evidence; without it the retail regime applies in full.
Traps
- Treating professional clients as outside all conduct rules; the diligence and documentation duties survive.
- Assuming the Benchmarks Ordinance binds only the administrator; supervised users must have written fallback arrangements.
- Mixing up FINMA (supervisory law) and SIX Exchange Regulation (exchange rules).
- Applying EU rules directly to a Swiss-only distribution without checking the cross-border analysis.