Switzerland and LiechtensteinWT/TPR/S/208 Page 113
SWX Swiss Exchange, founded in 1995 and based in Zurich, is Switzerland's stock exchange. The SWX group, in cooperation with Deutsche Börse, also operates Eurex, a derivatives exchange, as well as Scoach, an exchange for structured products. In 2007, total turnover of foreign and domestic securities (equities, funds, bonds, derivatives) was Sw F 2,528 billion44; total market capitalization of SWX Swiss Exchange was some Sw F 1,187 billion. The main legislation on stock exchange operations is the 1995 Stock Exchange Law (LBVM) and the relevant ordinances.45 Under the LBVM, stock exchanges must ensure sufficient self-regulation, and are subject to supervision by the SFBC. In order to be granted a licence, securities dealers must provide information and ensure internal separation of their trading, portfolio management, and settlement business; minimum fully paid-up capital is Sw F 1.5 million. Stock exchanges organized under foreign law are granted authorization to operate in Switzerland if they are subject to "appropriate supervision". As at end-2007, 3 domestic and 36 foreign stock exchanges have been granted authorization. Foreign securities dealers may request SFBC authorization to establish a Swiss branch; they must provide information and evidence of "adequate organization, sufficient financial resources, and qualified staff". In addition, foreign supervisory authorities must consent to cross-border operations, and to provide administrative assistance and information to the SFBC.
Collective investment funds are subject to the revised Collective Investment Law (LPCC) and ordinance.46 The new legislation provides that asset managers of Swiss collective investment schemes, based in Switzerland, must be authorized by the SFBC and are under its constant prudential supervision. These asset managers may be natural or legal persons; in the latter case they must be a joint-stock company, a stock company with unlimited partners, a limited liability company, a general partnership or a limited partnership. Asset management of Swiss collective investment schemes may also be delegated to foreign asset managers who are subject to recognized supervision. Foreign collective investment schemes can be distributed publicly in Switzerland with SFBC approval; a representative agent resident in Switzerland and licensed by the SFBC must be appointed for this purpose.
The supervision of Switzerland's financial sector has been under review for a number of years, and various reform projects in financial market regulation are under way.47 The most important project is the establishment of a unified and independent financial market supervisory authority (FINMA). Under this initiative, the SFBC, the Federal Office of Private Insurance (FOPI), and the MROS will be brought together through a Federal Act on Financial Market Supervision. Under the FINMA, which will become operational on 1 January 2009, the dualistic, indirect supervision model will be retained, whereby banks rely mostly on external auditors for supervision. At the same time, sanctions against infringement are to be harmonized, streamlined and reinforced. The authorities indicate that new rules on money laundering and financing of terrorism are also under preparation in the light of new FATF recommendations.
Most activities in Liechtenstein's financial services subsector are related to asset management. The subsector has traditionally benefited from Liechtenstein's political stability, its close ties with
44 Federal Department of Finance (2008a).
45 RS 954.1; RS 954.11; RS 954.193; and RS 954.195.1.
46 RS 951.31; RS 951.311; and RS 951.312.
47 For an overview of the various ongoing reform projects and their current status, see FinWeb online information, "Legislative action in the financial sector". Viewed at: http://www.finweb.admin.ch/e/ reformprojekte/index.php [6 April 2008].