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16. ago 2004 - Following the first part of the report on integrated financial market supervision, the Expert Commission appointed by the Federal Council and headed by Professor Ulrich Zimmerli has adopted the second part of the report on sanctions in financial market supervision for the attention of the FDF. Based on the existing system of sanctions, a new, more efficient, harmonised system of sanctions is proposed, consisting on the one hand of revised criminal provisions and on the other of new harmonised administrative sanctions.
In the first part of its report, the Zimmerli Expert Commission adopted recommendations on the organisation of the Federal Financial Market Supervisory Authority (FINMA) and on the supervisory instruments extending across areas of specialisation. According to the recommendations of the Expert Commission, initially the Swiss Federal Banking Commission (SFBC) and the Federal Office of Private Insurance (FOPI) should be brought together organisationally into the new authority. In the second part of its report, the Expert Commission amends the Federal Act on Financial Market Supervision proposed in the first part of its report (Financial Market Supervision Act [FINMA Act]) through a system of sanctions, demonstrating the sanctioning instruments with which a future FINMA should be equipped.
At the request of the Expert Commission, the SFBC has drawn up recommendations on expanding and strengthening the package of sanctions in financial market supervision. In the SFBC report on sanctions published on 3 May 2003, the SFBC concludes that today's scope for imposing sanctions fails to meet the current requirements in terms of financial market supervision. It points out that the system of sanctions is not varied enough and is incomplete and unbalanced. Moreover, the sanctioning procedure has proven cumbersome. FINMA should therefore be able to impose financial sanctions as well as professional sanctions by way of administrative ruling. The procedure should be essentially aligned with the Administrative Procedures Act, but expanded and reinforced by elements of federal criminal procedure. The infractions punishable under administrative law and contained in current supervisory legislation should be reduced to a minimum, and the remaining criminal offences should be punished with administrative sanctions.
The Zimmerli Expert Commission has examined the SFBC report on sanctions and considers it an innovative basis for discussion. However, it has in part reached different conclusions regarding the actual structure of the sanctioning system based on legal considerations. It proposes renouncing all administrative financial sanctions and continuing to impose fines for breaches of duty under administrative law. Criminal provisions, instead, are prioritised and harmonised, and the range of sentences uniformly lifted. Criminal offences that are not of practical relevance are eliminated. In addition, new harmonised administrative sanctions are proposed.
In criminal law, the following innovations are planned:
For administrative sanctions, the commission presents the following recommendations:
As far as market supervision is concerned, the Expert Commission will not be taking any further measures. It recommends restricting oneself in this area to the pending revision of Articles 161 and 161bis of the Swiss Criminal Code in connection with the implementation of the anti-money laundering measures of the Financial Action Task Force on Money Laundering (FATF).
Work on expanding prudential supervision has not yet been completed. The Expert Commission is expected to draw up a third report after consulting the head of the FDF.
For more information, please contact Barbara Schaerer, Federal Department of Finance, vice-president of the Expert Commission, telephone: +41 (0) 31 322 60 18
16 Aug 2004
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