SWITZERLAND Trends and Developments Contributed by: Ansgar Schott and Matthias Courvoisier, Baker McKenzie Switzerland
FinMIA Refit – Adjustments to Swiss Derivatives Regulation FinMIA and Swiss derivatives regulation The Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (“FinMIA”) came into force on 1 January 2016, and has since played a crucial role in regulat - ing the Swiss financial market. The FinMIA governs the organisation and operation of the financial market infrastructure, as well as the conduct obligations of financial market participants in securities and deriva - tives trading. It regulates the organisation and opera - tion of financial market infrastructures, which include exchanges, other trading systems, central counter - parties, payment systems, central securities deposi - tories, and trade repositories. Further details of the regulation are set out in the Ordi - nance on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (“Fin - MIO”), and in relation to the derivatives regulation, to a limited extent, also in the Ordinance of the Swiss Financial Market Supervisory Authority on Financial Market Infrastructures and Market Conduct in Securi - ties and Derivatives Trading (“FinMIO-FINMA”), which both came into force together with the FinMIA. The introduction of the FinMIA was a reaction to the global financial market crisis of 2008, which revealed considerable weaknesses in the regulation and supervi - sion of financial markets worldwide. Against this back - ground, the FinMIA pursued two main objectives: to strengthen the stability of the financial system and to promote the competitiveness of the Swiss financial cen - tre. In addition to these primary objectives, the FinMIA also aimed to ensure the protection of financial market participants and the equal treatment of investors. Despite the success of the FinMIA during the first few years of its application, technological advances and changes in international standards became appar - ent in the following years, necessitating a revision of the law. Particularly in the area of derivatives trad - ing, international standards have evolved significantly in recent years. For instance, the Financial Stability Board (FSB) recommended the introduction of global identifiers such as the legal entity identifier (LEI), the unique transaction identifier (UTI), and the unique
product identifier (UPI) as early as 2014 to enhance the transparency and oversight of derivatives trans - actions. The review of the FinMIA, conducted by the Federal Department of Finance (FDF) in 2022, revealed that the law in its current form no longer fully meets today’s requirements. Adjustments were found to be neces - sary to align the FinMIA with technological develop - ments and the evolution of international standards, as well as with relevant foreign legal systems, particularly EU regulations. A key point of this revision is the simplification and appropriate structuring of the norms and proportional - ity of the regulations. The goal is to ease regulations, particularly for small market participants, without compromising the stability of the financial system. Additionally, legal uncertainties identified over the years are to be addressed by the revision to increase legal certainty for all market participants. Legislative process and launch After the legal consultation process was completed last autumn, a revised draft bill was submitted to the Federal Council. The Federal Council is preparing the dispatch on this draft bill, which contains the draft bill as well as a report and analysis. The dispatch is expected to be published later this year and submit - ted to parliament for discussion in 2026. Therefore, the amendments to the FinMIA are expected to come into force in 2027 at the earliest. In line with the EMIR Refit (European Market Infra - structure Regulation Regulatory Fitness and Perfor - mance Programme), the authors have taken the liberty of referring to such amendments to the FinMIA as the “FinMIA Refit”. Current challenges Since the introduction of the FinMIA, derivatives trad - ing in Switzerland has been subject to various regu - latory obligations based on international standards. These obligations include the clearing obligation via a central counterparty, the reporting obligation to a trade repository, the risk mitigation obligations and the obligation to execute certain derivatives transactions on an exchange or other trading system.
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