According to the requirements of the Swiss Financial Markets Authority (FINMA), FlowBank SA, an online brokerage and trading bank headquartered in Geneva, has entered bankruptcy proceedings. Starting from 8:00 am on June 13, 2024, FINMA revoked FlowBank SA's banking and securities trading license and immediately ceased all commercial activities.

FINMA confirmed last week that FlowBank SA no longer has sufficient capital to maintain its banking business and the minimum capital requirements that must be met at all times have been seriously violated. FlowBank SA and its management are unable to take measures to continuously restore compliance with capital requirements within the specified time frame.

In addition, people have ample reason to worry about the bank's current excessive debt. Due to the lack of prospects for restructuring, the bank must be liquidated. FINMA has appointed Walder Wyss AG as the liquidator responsible for executing bankruptcy proceedings.

Customers who hold cash deposits in their Swiss accounts for customer refunds and asset transfers can receive a maximum compensation of 100000 Swiss francs per customer in the short term. The liquidators are formulating compensation terms and conditions and will notify the clients.

The custody assets held by the client, such as stocks, bonds, funds, and certificates, are separated from the bankruptcy property and will be returned to the client, subject to potential compensation or conditions determined by the liquidators.

FlowBank SA shall not engage in banking transactions or act as a securities dealer without explicit approval from the liquidators. This ban applies to all financial activities, including payments, securities trading, and legal commitments.

In October 2021, FINMA took its first enforcement action against FlowBank SA when it discovered that the company had seriously violated regulatory laws, particularly in terms of capital requirements, adequate organization requirements, and risk management. Therefore, FINMA ordered extensive measures to restore legal compliance in October 2022 and appointed an independent auditor to oversee the implementation of these measures. But the bank still continues to violate capital ratio requirements, and its entire operational process continues to have deficiencies.