Self-regulation

The financial sector of the Swiss economy has a long tradition of self-regulation. Its advantages are a practical approach, flexibility and a high level of differentiation. In collaboration with the Swiss Financial Market Supervisory Authority (FINMA), their regulatory authority, Swiss banks draw up binding codes of conduct in the form of guidelines and agreements, which define what constitutes good industry practice or, to put it in more modern terms, ethically correct management. One example of a code of conduct is the Due Diligence Agreement (CDB). The monitoring of the banks' compliance with codes of conduct is carried out on behalf of the FINMA by the auditors required by banking law.

This does not apply to so-called recommendations, which are drafted and issued without the FINMA being involved.

Basic principles

The following basic principles apply to issuing codes of conduct:

• It makes sense to have a code of conduct wherever the legislature has left room for one, or where it is in the banks' interests to voluntarily set standards for their conduct.
• SBA guidelines and agreements are submitted to the FINMA prior to being issued and are binding for all banks once approved. The monitoring of the banks' compliance with these guidelines and agreements is carried out on behalf of the FINMA by the auditors required by banking law. The FINMA may impose sanctions for any infringement.

Examples

Examples of guidelines include the Portfolio Management Guidelines, the Code of Conduct for Securities Dealers and the Directives on the Independence of Financial Research. An example of an agreement is the Agreement on the Swiss banks’ code of conduct with regard to the exercise of due diligence (CDB).

Recommendations include those for business continuity management (with the exception of sections 4.4, 4.5.1 and 4.5.2, where deviations are sanctioned by the FINMA).