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In February 2003, a panel of experts was informed about various recommendations to improve Swiss financial market supervision. As an initial measure, the panel has recommended appointing the Swiss Federal Banking Commission and the Federal Office of Private Insurance as the new financial market supervisory authority. For this purpose the two federal bodies should be merged organizationally within this new authority. By summer 2003, the panel plans to submit a draft of a federal law on financial market supervision which will come into force by the end of 2003 at the earliest.

The panel has, to a large extent, finished its work on the organizational section. Federal financial market supervision should acquire a strategic and an operational body. The supervisory board will primarily deal with the strategy of integrated financial market supervision and will advise management on questions of principle. Execution of the supervision is incumbent on management.

A question relating to allowing a purely organic law was posed. The panel opted to refrain from using this model because for the efficient deployment of a newly integrated financial market supervisory authority - alongside the organizational model - standardized supervisory instruments (for example, for implementing revisions), must also be in place. In view of the fact that the work of the panel is already at an advanced stage in this sector, it decided in summer 2003 to present a single model not just for the new organization but also for supervisory instruments, and to recommend a process to the Federal Council which guarantees the link between both components.

In a subsequent move the panel will comment on the question of upgrading the extensive (prudential) supervision of independent trustees, introducing brokers and exchange dealers. In other words, the topic remains highly dynamic.

Thomas Burkhalter

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