Swiss Financial Market Supervisory Authority publishes Circular 2025/4 to codify consolidated supervision of financial groups under the Banking Act and Financial Institutions Act

The Swiss Financial Market Supervisory Authority has published Circular 2025/4, setting out its supervisory practice on the scope and content of consolidated supervision of financial groups under the Banking Act and the Financial Institutions Act. The circular codifies an approach previously communicated through case-by-case decisions and is intended to clarify how group-wide risks are brought within supervision, following a public consultation that met with broad acceptance. The circular explains when group companies must be included in the regulatory scope of consolidation, focusing on the entity’s activity in the financial sector and whether there is an economic unit or a legal or de facto obligation to provide support under Article 3c(1) of the Banking Act. Financial-sector activity is described as provision and intermediation of financial services and can extend beyond activities requiring a Swiss licence or registration, and the test is independent of legal form, meaning special purpose vehicles may be included if the criteria are met. It also outlines the implications of consolidated supervision based on Article 24 of the Banking Ordinance, grouping expectations into quantitative and qualitative requirements, including elements of corporate governance at group level. The circular enters into force on 1 July 2025.