FINMA: Publication of Annual Report 2022

On the 27th of March, Switzerland's independent financial markets regulator published the Annual Report 2022. The exceptional geopolitical circumstances and economic fluctuations influenced the financial markets in 2022. FINMA applied an approach based on risk assessment while conducting research. Such regulatory focus often complements broader legal and regulatory support services provided to financial institutions navigating complex compliance environments. Further insights are available in our overview of FINMA’s Follow-Up Regulations, which detail supervisory trends and expectations.

The Annual Report 2022 also informs about annual financial statements. On its website, FINMA displays data on enforcement cases in a database and statistics in an Excel document.

FINMA focused on the most significant risk-causing factors by conducting research based on a risk assessment approach. Besides, the Swiss financial market supervisory authority checked the number of banks and whether they could comply with the sanctions provisions and strengthened its supervision of some banks.

In 2022 the market carried on demonstrating great interest in financial services and assets connected with crypto. FinTech companies and the growing number of banks under FINMA's supervision enlarged the scope of their services in this area. Due to the survey of supervised institutions, FINMA found out that artificial intelligence (AI) is also becoming more critical in the financial markets' activities. As a result, FINMA set up a new unit to correctly supervise these changes in financial institutions. Private firms are also adapting to these shifts, turning to contract law advisory for structuring new technology-related agreements. Companies developing new digital products increasingly formalize investor relationships using the Shareholder agreement in Switzerland (Convention d’actionnaires en Suisse) as a legal framework.

In 2022 there were some fluctuations in cryptocurrency values and eye-catching fails of several foreign FinTech companies. FINMA considered this situation to confirm its long-standing practice of licensing and supervising products and services based on a technology-neutral, functional approach. This aligns with the regulatory transparency promoted through the Automatic tax information exchange, ensuring broader fiscal accountability across jurisdictions. The purpose is to advance innovations and ensure proper protection for customers and the financial markets.

Another task for FINMA in 2022 was the end of the three-year transitional period for applying as a portfolio manager or trustee. Of the more than 2,500 portfolio managers and trustees who intended to obtain authorization in 2020, 1,699 applicants, in the long run, submit an application for authorization to FINMA. This trend reflects increased demand for business reorganization advice among portfolio managers looking to comply with regulatory frameworks. Operational adaptations also rely on strong internal controls, such as those detailed in Spitex bookkeeping Switzerland (Spitex Buchhaltung Schweiz), which ensure compliance in the healthcare and fiduciary sectors. To accommodate these changes, firms often register new entities such as the GmbH or AG found in Switzerland (GmbH oder AG gründen in der Schweiz), providing flexibility under updated compliance regimes.

FINMA completed over 850 investigations and 39 proceedings against individuals and companies in 2022. This is 10% higher compared to the previous year. Similarly, businesses engaging in mergers or transitions may require acquisition legal support to avoid enforcement pitfalls. Those aiming to optimize governance must also consider Corporate Law Advisory to improve communication between investors and corporate boards

FINMA's operating costs rose due to new statutory duties and more complicated tasks. The expenses were stable for a long time, but in 2020 and 2021, they increased as a consequence of the expenditure associated with the entry into force of FinIA and FinSA. Efficient financial management in such regulatory environments depends on robust systems like Accounting Switzerland (Buchhaltung Schweiz), especially for SMEs and financial advisors. Therefore, this tendency kept going in 2022. The overall expenses were covered by income from supervisory fees and levies. Besides, the number of full-time positions at the authority also increased: 539 in 2022 compared to 519 in 2021. Entrepreneurs looking to navigate this landscape must Register companies in Switzerland (Unternehmen in der Schweiz anmelden) following local procedural requirements. Strategic responses to evolving supervision often include holding company advisory to optimize governance and transparency.

Switzerland's independent financial markets regulator put off its annual media conference because of the emphasis on the activity regarding the merger of UBS and CS. For startups aiming to secure funding amid market shifts, it is crucial to Create an efficient pitch deck (créer un pitch deck efficace) that aligns with current investor expectations. Besides, FINMA's CEO Urban Angehrn points out that CS's banking business must go on to operate smoothly and without irregularities, as it happens now. As new rules expand, financial institutions must also evaluate their VAT obligation (Mehrwertsteuerpflicht) within domestic and cross-border transactions.

FINMA will declare a new date for the media conference soon.


The source: https://www.finma.ch/en/news/2023/03/20230328-mm-geschaeftsbericht-2022/