The Swiss Financial Market Supervisory Authority (FINMA) issues licences for banks, securities firms, asset managers, fund management companies, and insurance companies operating in or from Switzerland. The licensing framework is built on three primary laws: the Banking Act (BankG), the Financial Institutions Act (FinIA), and the Financial Services Act (FinSA). Each licence category has distinct capital requirements, organisational standards, and ongoing reporting obligations. This guide explains each category, the application process, and realistic costs and timelines.
For a direct assessment of your licensing requirements, contact Morgan Hartley Consulting.
FINMA Licence Categories Overview
FINMA supervises the following licence categories, each governed by specific legislation:
| Licence | Governing law | Minimum capital | Typical timeline |
|---|---|---|---|
| Banking | BankG | CHF 10M+ | 12-18 months |
| Securities firm | FinIA | CHF 1.5M+ | 9-15 months |
| Asset manager (individual) | FinIA | CHF 100,000 | 6-12 months |
| Asset manager (collective) | CISA/FinIA | CHF 200,000-1M | 9-15 months |
| Fund management company | CISA | CHF 1M+ | 12-18 months |
| FinTech (sandbox) | BankG Art. 1b | CHF 300,000 | 3-6 months |
| Insurance | VAG | Varies | 12-24 months |
Each licence is issued to a Swiss-domiciled legal entity. Foreign entities must establish a Swiss presence — either a subsidiary (AG or GmbH) or a branch office — before applying.
The FINMA licence application is assessed against organisational, capital, governance, and fit-and-proper criteria. FINMA has broad discretion and can impose additional conditions beyond the statutory minimums.
Banking Licence
The banking licence under the Banking Act (Bankengesetz, BankG) is required for any entity that accepts public deposits on a professional basis or advertises deposit-taking services.
Key requirements:
- Minimum share capital: CHF 10 million, fully paid in (FINMA often requires more)
- Adequate organisation: clear separation between management and control functions
- Fit and proper board and senior management
- Internal controls: compliance, risk management, internal audit
- External audit by a FINMA-recognised audit firm
- Anti-money laundering (AML) programme
- Recovery and resolution planning
The banking licence is the most demanding FINMA licence category. Applications typically require 12 to 18 months of preparation before filing and 6 to 12 months of FINMA review. Pre-application discussions with FINMA are strongly recommended and can significantly improve the quality and speed of the formal application.
A FINMA-licensed entity operating as a bank is subject to ongoing supervision, including annual audits, quarterly capital adequacy reporting, and ad hoc information requests.
Asset Management Licence
The asset management licence under FinIA is required for firms managing individual client portfolios on a discretionary basis. Since the full implementation of FinIA, all asset managers must be licensed and supervised — either directly by FINMA or through an authorised supervisory organisation (SO).
Requirements:
- Swiss AG or GmbH with registered office in Switzerland
- Minimum capital: CHF 100,000 (individual asset managers) or CHF 200,000 to 1 million (collective asset managers)
- Qualified management with at least 5 years of relevant experience
- Internal compliance function
- Affiliation with a FINMA-authorised supervisory organisation
- AML compliance (AMLA and FINMA CDB)
Asset managers who previously operated under the former exemptions must now hold a FinIA licence. The transitional deadlines have passed, and unlicensed operation is subject to enforcement action.
Securities Firm Licence
Securities firms (formerly securities dealers) are licensed under FinIA for activities including proprietary trading, market making, underwriting, and operating trading venues.
Requirements:
- Minimum capital: CHF 1.5 million for standard securities firms
- Adequate organisation with risk management and compliance
- Fit and proper board and management
- FINMA-recognised external auditor
- Capital adequacy and liquidity reporting
Securities firms face capital requirements that scale with their balance sheet and off-balance-sheet exposures. Large firms with significant proprietary trading desks may need CHF 10 million or more.
FinSA Obligations for Financial Service Providers
The Financial Services Act (FinSA/FIDLEG) applies to all financial service providers regardless of their licence category. FinSA establishes client protection rules:
- Client classification: retail, professional, or institutional
- Suitability and appropriateness assessments: before recommending financial instruments
- Information and disclosure obligations: cost transparency, conflicts of interest
- Prospectus requirements: for public offerings of securities
- Advisor registration: individual client advisors must register in an advisor register
- Ombudsman affiliation: mandatory membership in an ombudsman scheme for dispute resolution
FinSA applies to banks, securities firms, asset managers, insurance companies, and any other entity providing financial services in or from Switzerland. Non-compliance can result in FINMA enforcement, civil liability, and criminal penalties.
FINMA Application Process
The typical FINMA licensing process follows these stages:
- Pre-application phase (2-6 months): business plan development, legal structure setup, pre-application meetings with FINMA
- Application filing: submit the complete application dossier to FINMA
- FINMA review (3-12 months): detailed assessment of all application components, information requests, and clarifications
- Conditional approval: FINMA may grant approval subject to conditions (e.g., hiring specific personnel, implementing IT systems)
- Licence grant: formal licence issuance after all conditions are met
- Operational launch: begin regulated activities under FINMA supervision
FINMA applications must be thorough. Incomplete applications are returned, and resubmission resets the review timeline. Professional preparation is strongly recommended — the rejection rate for poorly prepared applications is significant.
Capital and Organisational Requirements
Beyond minimum capital, FINMA assesses:
Organisational structure: clear governance with defined responsibilities. The board of directors must include at least one member independent of the executive team. Committees (audit, risk, compliance) may be required depending on size.
Internal controls: three lines of defence model — operational management, compliance/risk management, internal audit. Outsourcing is permitted for certain functions but the licence holder retains responsibility.
IT and cybersecurity: FINMA Circular 2023/1 on operational risks requires documented IT governance, cybersecurity frameworks, business continuity planning, and incident response procedures.
AML compliance: Customer identification (KYC), transaction monitoring, suspicious activity reporting to MROS (Money Laundering Reporting Office Switzerland), and ongoing due diligence. Compliance with the FINMA Anti-Money Laundering Ordinance is mandatory.
Ongoing Supervision and Reporting
Once licensed, FINMA-supervised entities face ongoing obligations:
- Annual regulatory audit by a FINMA-recognised audit firm
- Quarterly capital adequacy reports (banks and securities firms)
- Annual AML compliance review
- Ad hoc reporting of material events (management changes, significant losses, regulatory breaches)
- Annual supervisory fees based on institution size and complexity
FINMA conducts on-site inspections and can request information at any time. Non-compliance with reporting obligations can result in conditions, restrictions, or — in serious cases — licence revocation.
Timeline and Costs
| Phase | Timeline | Cost range |
|---|---|---|
| Pre-application preparation | 2-6 months | CHF 50,000-150,000 (legal/advisory) |
| FINMA application fee | At filing | CHF 10,000-50,000 |
| FINMA review period | 3-12 months | Internal costs (staffing, systems) |
| Total first-year costs (banking) | 12-18 months | CHF 500,000-1,500,000+ |
| Total first-year costs (asset mgmt) | 6-12 months | CHF 100,000-300,000 |
| Ongoing annual costs | Recurring | CHF 50,000-500,000+ |
These figures exclude the minimum capital requirements, which are held as equity, not spent.
Common Reasons for Rejection
FINMA rejects or returns applications for:
- Incomplete documentation: missing business plans, governance documents, or financial projections
- Inadequate capital: proposing the statutory minimum when the business model requires more
- Fit and proper failures: management without sufficient experience, or with regulatory or criminal issues
- Weak compliance frameworks: generic AML policies without Switzerland-specific content
- Unclear business model: FINMA must understand exactly what the entity will do and how
Pre-application consultation with FINMA reduces rejection risk substantially. FINMA staff are generally constructive in these meetings and will flag potential issues early.
How Morgan Hartley Consulting Can Help
FINMA licensing requires legal, regulatory, and organisational expertise. Morgan Hartley Consulting assists with:
- Licence category assessment: determining which FINMA licence your business requires
- Business plan and regulatory concept preparation
- Pre-application meetings with FINMA
- Application dossier compilation and filing
- Ongoing compliance support post-licensing
- FinSA compliance frameworks
- Asset management and banking licence applications
Request a free initial assessment to determine your licensing requirements and expected timeline.
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