FINMA revokes Swiss Fund Management AG's licence and bans an executive over FinSA suitability and conflict-of-interest breaches
Swiss asset managers and portfolio managers must run genuine FinSA suitability and appropriateness checks and disclose affiliate conflicts — FINMA revoked a fund manager's licence, refused another's authorisation and confiscated commission for selling clients in-house illiquid bonds
Change
On 1 May 2026 the Swiss Financial Market Supervisory Authority (FINMA) concluded enforcement proceedings against Swiss Fund Management AG in liquidation (SFM) and BZ Berater Zentrum AG (BZ), finding serious breaches of the conduct-of-business duties under the Financial Services Act (FinSA): it revoked SFM's licence as a manager of collective assets and appointed a liquidator, rejected BZ's portfolio-manager authorisation, imposed a multi-year industry ban on a responsible individual, and confiscated over CHF 3 million in commission.
Why it matters
FINMA found that BZ placed around 2,000 asset-management mandates — about CHF 200 million of investor money — directly or via SFM's funds into illiquid bonds issued by entities all affiliated with the people running SFM and BZ, whose proceeds were passed on unsecured to real-estate ventures the same individuals controlled. Investors were not informed of these conflicts, and the concentrated, self-interested holdings were inconsistent with clients' risk profiles and pension-provision objectives. FINMA classified this as a serious breach of the appropriateness and suitability checks required under the FinSA. The ruling, now legally effective, revokes SFM's collective-asset-management licence (with Grant Thornton AG as liquidator), rejects BZ's independent-portfolio-manager authorisation (forcing it to cease asset management within 30 days), bans one responsible individual from the industry for several years, and confiscates over CHF 3 million in commission earned from placing the bonds. FINMA did not prohibit repayments or interest on existing bond investments, which may continue for investors' benefit.
Implications
- — Independent portfolio managers and managers of collective assets supervised under the FinSA must perform genuine appropriateness and suitability checks against each client's risk profile and objectives before allocating mandates — FINMA treated placing clients in holdings inconsistent with their risk profiles and pension objectives as a serious, licence-revoking conduct breach, not a documentation lapse.
- — Asset managers selling in-house or affiliated products must identify and disclose conflicts of interest where the product issuer, the manager and the ultimate recipient of proceeds are linked — FINMA found the failure to inform investors of these affiliations, and the resulting subordination of client interests, central to the breach.
- — Compliance and product-governance teams at Swiss financial service providers must test for concentration and self-dealing where client funds flow into affiliated illiquid instruments — FINMA confiscated over CHF 3 million in commission accrued since the FinSA conduct rules took effect, showing remuneration from non-compliant placements is recoverable.
- — Senior individuals responsible for conduct breaches face personal consequences — FINMA imposed a multi-year industry ban on one responsible individual alongside the firm-level measures.
Who is affected
- — Independent portfolio managers and managers of collective assets supervised under the FinSA
- — Asset managers and distributors placing affiliated or in-house investment products with clients
- — Compliance and product-governance teams at Swiss financial service providers
- — Senior managers personally responsible for conduct-of-business compliance