Swiss businesses have enjoyed favourable startup conditions, a high quality of life, and a stable economy in recent years, making the Alpine nation a prime destination for a range of companies and candidates. Oncoming regulatory pressures represent a new era of business. As part of our Key Trends for Regulated Business series, our consultants are exploring the latest developments in Switzerland's dynamic market. Read on to find out more.

Revisions to the Insurance Supervision Act (VAG)

The revised ISA entered into force alongside the Insurance Supervision Ordinance, on January 1st, 2024, launching a new set of criteria for FINMA (The Swiss Financial Market Supervision Authority) to supervise. Only by meeting this criteria can insurance intermediaries operate in Switzerland.

The changes are angled towards driving greater transparency, particularly in the life insurance sector, by introducing new measures to protect buyers. For example, customer categorisation is now a requirement, and providers will need to check what kind of risks their products represent for different policyholders.

In many cases, the revisions have resulted in an increased compliance burden (including additional personnel costs) across the whole value chain for insurance intermediaries. If you need help navigating the changes, or you’re not quite sure how to prepare your business yet, Broadgate's compliance team is here to help. Contact them here for a free consultation: https://www.broadgatestaffing.com/discipline/compliance.

Mandatory Climate Reporting for Large Firms

On January 1st, 2024, the Federal Council brought a mandate into force requiring large firms to publicly disclose the impact of their activities on climate change. The reports must be kept live and open to the public for a minimum of 10 years.

The move marks a shift towards greater regulatory clarity around climate-focused finance reporting, an area that, until recently, has been somewhat lacking in direction.

The ordinance reflects Switzerland’s commitment (and the 2014/95/EU Directive) to achieve net zero by 2050, a climate law that the Swiss public voted into force back in 2023.

The new regulation will apply to banks, insurers, and public companies that employ 500 or more employees. Moreover, covered firms will also need to have a balance sheet of CHF 20 Million or a CHF 40 Million turnover.

Whilst the regulations came into force at the start of this year, the first reports are not due until January 1st, 2025, giving businesses more time to invest in their data infrastructures, from their tech to their talent.  

Whether you’re building out a compliance function or searching for a new director, it’s important to prepare early, otherwise, you’ll risk doing more damage to your business later on down the line. 

Banking Stability Measures

In 2023, Credit Suisse, Switzerland's second-biggest bank, collapsed amidst a slew of scandals, including money laundering and terrorist financing. UBS, the largest Swiss financial institute, rescued the bank until it too had to be bailed out by the government.

The regulations (many of which were introduced in the last major banking crisis back in 2007) had failed, and the FINMA called out for greater powers.

We can expect some big changes to the regulatory landscape in the years ahead, particularly regarding the proposed introduction of the Public Liquidity Backstop (PLB) for systemically important banks. The proposal was initially made back in September 2023, but it’s been addressed more recently by the BIS (Basel Committee on Banking Supervision).

The implementation of new banking supervision measures includes a Senior Managers Certification Regime, similar to the one found in the UK. Alongside these new monitoring measures, the FINMA will likely be empowered to impose fines.

Support from Broadgate

Our Swiss-focussed recruiters have been supporting businesses through growth and transformation periods since 2015, and in that time, we’ve used a community-led approach to recruitment, enabling us to identify and attract top candidates in fiercely competitive environments (including risk and compliance). If you’re hoping to expand your talent pool and strengthen your hiring process, our full-service recruitment methodology has got you covered. Contact the team here to learn more: https://www.trinnovogroup.com/contact-us