FINMA licence categories explained

The FinIA cascade is the spine of Swiss financial licensing

FinIA replaced a patchwork of older regimes and brought four financial-institution types under one act on 1 January 2020 (SR 954.1, the Federal Act of 15 June 2018 on Financial Institutions). The act is deliberately ordered. Each higher institution may, as a rule, also carry out the activities of the ones beneath it, so the categories nest rather than sit side by side. Read from the bottom up, the four FinIA licences are these.

A portfolio manager manages the assets of individual clients under a power of attorney, in the clients' name and on their account. This is the licence most independent Swiss wealth managers now hold. It also covers managing assets of collective schemes and occupational pension funds as long as those stay below a de minimis size.

A trustee holds and administers a separate trust estate as trustee of a trust on a commercial basis. Switzerland does not have its own trust law, but it recognises foreign trusts, and the person acting as trustee from Switzerland needs this licence once the activity is commercial.

A manager of collective assets manages collective investment schemes or occupational pension assets above the de minimis size that a portfolio manager is allowed to handle. Cross the threshold and the lighter licence stops covering you; this is the next rung.

A securities firm, the term FinIA uses for what the old law called a securities dealer, trades in securities for the account of clients or for its own account, makes markets, or underwrites and places issues. It is the highest of the four FinIA categories and the one closest to a bank.

The two thresholds that decide portfolio manager versus the rung above

Two numbers separate the lighter FinIA licences from the heavier ones, and getting them right is most of the scoping work. For trustees, the line is commercial activity: FINMA treats a trustee as acting commercially once it manages trust funds exceeding CHF 5 million at any given time, one of the criteria it sets out for portfolio managers and trustees. Below that, no FinIA trustee licence is required, though AML duties can still apply.

For collective assets, the line is size. A portfolio manager may manage collective schemes only while assets under management stay at or below CHF 100 million including leveraged positions, or CHF 500 million for non-leveraged schemes whose investors cannot redeem for five years. Above that de minimis ceiling, the firm needs the manager-of-collective-assets licence instead. The ceiling is what turns a portfolio manager into something larger; it is not a formality, and FINMA expects firms approaching it to apply before they cross it.

Above FinIA sit the fund management company and the bank

Two further licences carry obligations that FinIA institutions do not. A fund management company is authorised under the Collective Investment Schemes Act (CISA, SR 951.31) to administer Swiss investment funds in its own name and for the account of investors. It is the entity at the centre of a Swiss contractual fund. Managing the fund's assets and administering the fund are distinct roles, and CISA also recognises the SICAV, the limited qualified investor fund (L-QIF) and representatives of foreign funds; our guide to Swiss fund and collective investment licensing sets out how those fit together.

A bank is licensed under the Banking Act (BankG, SR 952.0). The defining act of a bank is taking public deposits and then lending or investing them, running maturity transformation on its own balance sheet. This is the most demanding authorisation in the Swiss system. Capital, liquidity, governance and resolution planning all apply at a level no FinIA institution faces, and FINMA supervises larger banks directly rather than through an audit firm alone.

The FinTech licence is a lighter deposit licence below the banking line

The FinTech licence occupies the gap between taking no deposits and being a bank. It lives in art. 1b of the Banking Act and has applied since 1 January 2019. It permits a firm to accept public deposits of up to CHF 100 million, on the strict condition that those deposits are neither invested nor bear interest. That condition is the whole point: a FinTech-licensed firm may custody and move client money at scale, but it may not run a lending book or pay interest, so it carries none of a bank's maturity-transformation risk. FINMA publishes the requirements on its FinTech authorisation pages. Breach the CHF 100 million cap, or start investing the deposits, and the firm needs a full banking licence. The trade-off is set out in our note on the Swiss banking and FinTech licence.

The DLT trading facility licence is a market-infrastructure category

A DLT trading facility is a licensed venue for trading ledger-based securities, and it is not a FinIA institution at all. It belongs to market-infrastructure law, under the Financial Market Infrastructure Act, and the category has been available since 1 August 2021 as part of Switzerland's Distributed Ledger Technology framework. What makes it distinctive is consolidation: a single DLT trading facility may combine trading, clearing, settlement and custody of DLT securities, including for retail participants, where traditional markets split those functions across separate regulated entities. Firms building on tokenised securities should scope this against the securities-firm licence, because the right answer depends on whether you are operating a venue or dealing on one.

Who needs which: the licence by activity

The licence follows the activity, so the cleanest way to scope a Swiss business is to describe precisely what it does with client assets, then read off the lowest rung that lawfully covers all of it. The table below maps the common activities to their authorisation, with the legal basis, the minimum capital floor and the supervisor for each.

In the authorisation files we run, the part that bites is rarely the capital line. It is the boundary work: proving an activity sits below a threshold rather than above it, or that a planned business model does not quietly cross from portfolio management into managing collective assets, or from a FinTech model into deposit-taking that a court would read as banking. The capital is usually the simplest condition in the file. The classification is where the time goes, and where a wrong answer is expensive to unwind after launch.

Below the ladder, AML-only intermediaries take SRO affiliation

Not every financial business needs a FINMA licence, and assuming it does is a common and costly error. Below the prudential threshold, a large class of intermediaries operates under anti-money-laundering supervision alone. They affiliate to one of the FINMA-recognised self-regulatory organisations (SROs) rather than holding a licence. Money-changers, certain payment and crypto brokers and similar intermediaries whose work triggers duties under the Anti-Money Laundering Act, but not a prudential licence, all sit here.

The distinction matters because the two statuses are not interchangeable. An SRO affiliation is an AML status: it confirms the firm has joined a supervised AML regime and submits to its audit. It says nothing about prudential capital, investment competence or the right to manage client portfolios. A firm that holds only SRO membership and presents itself as "Swiss-regulated" in the sense of holding a FINMA licence is overstating its status. How the affiliation works in practice, who must join, the recognised SROs and the process, is covered in our guide to SRO membership.

What a FINMA licence does not do

A licence proves a structure. It says nothing about a return, and reading more into it than that is where misplaced expectations start. Three limits are worth stating plainly.

It does not certify investment quality. A portfolio-manager or securities-firm licence confirms capital, organisation and fit-and-proper management. It is no opinion on whether the firm's strategy is sound or its products will perform. FINMA pays nothing for investment losses and does not arbitrate individual client disputes.

A higher licence does not flow downward into a free pass. The cascade lets a higher institution absorb lower activities, but the reverse never holds. A portfolio-manager licence does not permit dealing in securities for own account or taking public deposits. Each additional activity has to be inside the scope of the licence actually held, or it needs a different one.

A licence is not a one-off event. It is the start of a standing relationship. The firm files reports, undergoes its periodic audit by a licensed audit firm or its Supervisory Organisation, and pays an annual supervisory levy. Material changes (new owners, new managers, new business lines) need notification or fresh approval before they happen. Scoping the right licence at the outset is covered in our FINMA authorisation service, and the wider map of Swiss financial supervision sits across our FINMA licensing guides.