Facts
The Swiss Financial Market Supervisory Authority (FINMASA) had ordered the regulatory liquidation of Realcapital Invest AG, a real estate holding company, due to its connections to a group of companies that were operating as securities dealers without the required authorisation. The Federal Supreme Court (DFC) overturned this liquidation order and remanded the case to FINMASA for re-evaluation. Realcapital Invest AG was founded in 2004 and held participations in several real estate companies. It raised funds through capital increases, which were then invested in specific real estate projects. The DFC concluded that the activities of Realcapital Invest AG, considered on their own, were not subject to the requirement of authorisation under either stock exchange or banking law. While there were indications that Realcapital Invest AG was involved in the activities of a group that was operating as an unauthorised issuing house, the DFC found that the immediate liquidation had been disproportionate, as Realcapital Invest AG itself had not engaged in any activities requiring authorisation, and its participations in real estate companies were still valuable at the time of the order. The DFC remanded the case to FINMASA, instructing it to thoroughly examine the possibility of continuing Realcapital Invest AG's operations.Considerations
The DFC first confirmed FINMASA's authority to take all necessary measures to eliminate irregularities and restore proper order, even with respect to institutions whose obligation to be subject to supervision or to obtain authorisation is still disputed. FINMASA can order the regulatory liquidation of financial intermediaries operating without authorisation in order to protect creditors or investors and ensure the integrity of the capital market. However, the measures must be proportionate. If a company engages in both an activity requiring authorisation and a financially market-compliant activity, only the part requiring authorisation is to be liquidated. Furthermore, it must be assumed that there will no longer be any relevant risk that unauthorised activities requiring authorisation could be carried out…