SWITZERLAND Law and Practice Contributed by: Olivier Favre and Tarek Houdrouge, Schellenberg Wittmer Ltd
• FINMA must apply the trading obligation in line with international standards and international developments; • the trading obligation will not be applicable to transactions that are not available for trading on a trading venue; and • physically settled FX forwards and swaps may not be subject to a trading obligation. To the extent that FINMA will declare such trading obligation to be applicable, it is unlikely that this would, in any event, go beyond the obligations appli - cable under EMIR. 3.1.4 Position Limits The rules of the FinMIA provide for the competence of the Swiss Federal Council to put in place obligations on position limits for commodity derivatives. However, the Swiss Federal Council has not made use of such competence and there are no indications that such competence will be exercised in the near future. 3.1.5 Reporting Reporting of OTC Derivatives and ETDs The Swiss regulatory requirements of the FinMIA pro - vide for reporting obligations regarding OTC deriva - tives and ETDs. Note that it is currently not possible to satisfy such reporting obligations under foreign rules that have been recognised as equivalent by FINMA (eg, those of EMIR), because no foreign trade reposi - tories are recognised by FINMA for the purposes of reporting under a jurisdiction other than the FinMIA. For OTC derivatives The reporting obligation depends on the status of the counterparties involved. In any event, a small non- financial counterparty never has a reporting obliga - tion. The Swiss rules provide for a one-sided reporting regime that imposes a reporting obligation under the rules of the FinMIA on one of the parties to a transac - tion, as follows: In transactions between two Swiss counterparties – • where one is a financial counterparty and the other is a non-financial counterparty, the financial coun - terparty reports;
• where one is a large and the other is a small finan - cial counterparty, the large financial counterparty reports; • where one is a large and the other is a small non-financial counterparty, the large non-financial counterparty reports; • where both are large financial counterparties or both are small financial counterparties or both are large non-financial counterparties, the seller reports (if there is a seller) or, if not, the party as deter - mined by the ISDA tie-breaker rules reports; and • where both are small non-financial counterparties, no party reports. Further to the above rules, note that there is no intra- group exemption. Therefore, unless the transaction is entered into between two small non-financial counter - parties, it is subject to a reporting obligation. In transactions between a Swiss and a foreign counterparty – • the Swiss party reports, unless it is a small non- financial counterparty; and • if the Swiss party is a small non-financial counter - party, there is currently an exemption in place until 1 January 2028, however, with the proposed Fin - MIA Refit, such obligation will generally be waived for small non-financial counterparties. For ETDs The reporting obligation falls on the Swiss party in the clearing chain that is closer to the foreign CCP. To the extent that it is a clearing arrangement between a Swiss and a foreign clearing services provider, the obligation falls on the Swiss party. If the Swiss party at the end of the clearing chain is a small non-financial counterparty, there is currently an exemption in place until 1 January 2028, however, with the proposed Fin - MIA Refit, such obligation will generally be waived for small non-financial counterparties. Transaction Reporting Separately from the above, trading of OTC deriva - tives on securities listed or admitted to trading on a Swiss regulated exchange as underlyings fall into the scope of the transaction reporting requirements under the Swiss rules, to the extent that the weight of such
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