Federal Act
on the Swiss Financial Market Supervisory Authority
(Financial Market Supervision Act, FINMASA)

¹ In or­der to im­ple­ment the fin­an­cial mar­ket acts, FINMA may it­self carry out dir­ect audits of su­per­vised per­sons and en­tit­ies abroad or have such audits car­ried out by audit agents.⁸⁵

² It may per­mit for­eign fin­an­cial mar­ket su­per­vis­ory au­thor­it­ies to carry out dir­ect audits of su­per­vised parties provided:

a.

these au­thor­it­ies are re­spons­ible for the su­per­vi­sion of the audited su­per­vised party as part of home coun­try su­per­vi­sion or are re­spons­ible for su­per­vising the activ­ity of the audited su­per­vised party in their ter­rit­ory; and

b.

the con­di­tions for ad­min­is­trat­ive as­sist­ance set out in Art­icle 42 para­graph 2 are ful­filled.⁸⁶

³ In­form­a­tion may be col­lec­ted through cross-bor­der dir­ect audits only if it is re­quired for the su­per­vis­ory activ­ity of the for­eign fin­an­cial mar­ket su­per­vis­ory au­thor­ity. This in­cludes in par­tic­u­lar in­form­a­tion on wheth­er an in­sti­tu­tion throughout its group struc­ture:

a.

is ap­pro­pri­ately or­gan­ised;

b.

re­cords, lim­its and mon­it­ors in an ap­pro­pri­ate man­ner the risks in­her­ent in its busi­ness op­er­a­tions;

c.

is man­aged by per­sons who guar­an­tee prop­er busi­ness con­duct;

d.

ful­fils the own funds and risk di­ver­si­fic­a­tion reg­u­la­tions on a con­sol­id­ated basis; and

e.

prop­erly com­plies with its re­port­ing du­ties vis-à-vis the su­per­vis­ory au­thor­it­ies.⁸⁷

^3bis If dur­ing dir­ect audits in Switzer­land for­eign fin­an­cial mar­ket su­per­vis­ory au­thor­it­ies wish to con­sult in­form­a­tion linked dir­ectly or in­dir­ectly to the as­set man­age­ment, se­cur­it­ies trad­ing or de­pos­it busi­ness for in­di­vidu­al cli­ents, FINMA shall col­lect this in­form­a­tion it­self and trans­mit it to the re­quest­ing au­thor­it­ies. The same ap­plies to in­form­a­tion which dir­ectly or in­dir­ectly relates to in­di­vidu­al in­vestors in col­lect­ive in­vest­ment schemes. Art­icle 42a ap­plies.⁸⁸

^3ter FINMA may, for the pur­poses de­tailed in para­graph 3, al­low the for­eign fin­an­cial mar­ket su­per­vis­ory au­thor­ity which is re­spons­ible for the con­sol­id­ated su­per­vi­sion of the audited su­per­vised party to con­sult a lim­ited num­ber of in­di­vidu­al cli­ent dossiers. The dossiers must be se­lec­ted ran­domly on the basis of pre­defined cri­ter­ia.⁸⁹

⁴ FINMA may ac­com­pany the for­eign au­thor­it­ies re­spons­ible for fin­an­cial mar­ket su­per­vi­sion on their dir­ect audits in Switzer­land or ar­range for them to be ac­com­pan­ied by an audit com­pany or an audit agent. The su­per­vised per­sons and en­tit­ies con­cerned may re­quest such ac­com­pani­ment.⁹⁰

⁵ Es­tab­lish­ments or­gan­ised un­der Swiss law must provide the for­eign fin­an­cial mar­ket su­per­vis­ory au­thor­it­ies and FINMA with the in­form­a­tion re­quired to carry out the dir­ect audits or the in­form­a­tion that FINMA re­quires to provide the ad­min­is­trat­ive as­sist­ance, and must per­mit the in­spec­tion of their books.

⁶ Es­tab­lish­ments are defined as:

a.

sub­si­di­ar­ies, branch of­fices and rep­res­ent­at­ive of­fices of su­per­vised per­sons and en­tit­ies or of for­eign in­sti­tu­tions; and

b.

oth­er com­pan­ies, provided their activ­ity is in­cluded by a fin­an­cial mar­ket su­per­vis­ory au­thor­ity in the con­sol­id­ated su­per­vi­sion.