We are excited about the developments we have made so far at Creditum. We are in the process of securing an SRO license. This article breaks down what an SRO license does and its scope:
An SRO is a self-regulatory organization with regulatory authority over a certain industry or profession. Its main goal is setting rules, supervising member financial intermediaries, and ensuring the set standards and laws are followed. An SRO may be used to supplement the current government regulation or work without a certain regulation.
Joining an SRO
To use an SRO, you must be a member; this can be done through licensing. It would help to have a business plan, certificate or character, and letters of reference to be an SRO member. The wealth manager needs relevant education and experience in the field. There may be a need for additional requirements, depending on the SRO.
In Switzerland, all financial intermediaries are obliged to be members of an SRO, according to the Anti-money Laundering Act. This will ensure companies comply with the set requirements and acts as an alternative to the Swiss Financial Market Supervisory Authority (FINMA).
All commercial, financial intermediaries must either have a FINMA license or be a member of an SRO recognized by FINMA.
FINMA is the body that approves regulations and amendments of the SRO. FINMA defines how the financial intermediaries affiliate implement the legal requirements of the Anti-Money Laundering Act(AMLA). Financial intermediaries such as banks, investment companies, Insurance, fund managers, payments systems, etc., are all subject to FINMA.
FINMA acknowledges a company as an SRO if;
● It has the right regulations in place, which observe the AMLA due diligence
● Monitors compliance
● Does auditing to ensure compliance
● Ensures auditing meets the terms of the AMLA
FINMA does an audit of SRO from time to time, including on-site inspections. If an SRO initially meets the expectations and then falls back, FINMA will give a warning or may withdraw the membership.
In Switzerland, eleven SROs are listed with FINMA and control financial intermediaries.
If an SRO makes any regulations or amendments, they have to be approved by FINMA. It defines all requirements under AMLA, including contractual partners, benefits, and any signs of money laundering. They define compliance and any penalties upon breach. An SRO can also penalize members and suspend them.