SWITZERLAND Law and Practice Contributed by: Judith Raijmakers and Florian Thomas Willi, Loyens & Loeff
would not be subject to more restrictive pro - visions compared to foreign banks in Switzer - land). Verification of reciprocity is not required if international agreements that provide for reciprocity, such as those with WTO member states, exist. • The bank’s company name must not imply or suggest that the bank has a Swiss charac - ter (meaning the public must not be misled directly or indirectly with respect to the bank being under foreign control). • If the transfer to foreign control leads to the bank becoming part of a financial group, FINMA may require the consent of the foreign supervisory authority. FINMA may make the licence conditional on ensuring adequate consolidated supervision. Foreign-controlled banks also require authorisa - tion with respect to changes concerning quali - fied participations in such banks. Passporting As Switzerland is not a member state of the EU, passporting is not available to Swiss banks. 4. Governance 4.1 Corporate Governance Requirements Overview FINMA published Circular 2017&/1 – Corporate Governance – Banks dealing with governance requirements for banks. The circular outlines the requirements for corporate governance, risk management, internal control systems, and internal audit that banks are expected to meet. Executive Board The management is responsible for executing the bank’s day-to-day business operations in line with the business strategy and the directives
set forth by the board of directors. Key respon - sibilities include: • overseeing daily operations, managing opera - tional income, and assessing risks, including balance sheet structure and liquidity manage - ment; it also acts as the representative of the institution in all operational matters involving third parties; • presenting proposals for business decisions to the board; and • designing and maintaining effective internal processes. The executive board also develops the risk poli - cy as well as the basic features of the bank-wide risk management. Members of the executive board, individually and also with respect to the body as a whole, must have adequate management expertise, specialist knowledge and experience of bank - ing and financial services. This is required to ensure compliance with licensing requirements in connection with the institution’s operational activities. See 4.2 Registration and Oversight of Senior Management with respect to the appli - cable fit and proper standards. As banks need to be effectively managed from Switzerland, managing directors must reside in a location where they can effectively and respon - sibly fulfil their duties. Decisions and directives within the framework of group supervision must be made from Switzerland. Board of Directors The board of directors holds the ultimate respon - sibility for the management, oversight, and stra - tegic direction of the bank. It defines the bank’s business strategy and establishes its risk policy, ensuring the effective regulation, implementa -
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