Federal Council brings Financial Market Infrastructure Ordinance amendment into force

Bern, 05.07.2017 - During its meeting on 5 July 2017, the Federal Council adopted an amendment to the Financial Market Infrastructure Ordinance. It will enter into force on 1 August 2017. This revision will bring the Swiss regulations on the exchange of collateral into line with the now established EU regulations.

The Financial Market Infrastructure Ordinance (FinMIO) entered into force on 1 January 2016 and, among other things, contains implementing provisions for the duty governed by the Financial Market Infrastructure Act (FinMIA) to exchange collateral for OTC derivatives transactions that are not cleared via a central counterparty. These provisions have now been brought into line with the corresponding EU regulations, which entered into force at the start of February 2017, thereby ensuring that Swiss market participants do not suffer any competitive disadvantages relative to their European competitors.

Specifically, the amendment has removed the current provision whereby counterparties may not change the method of calculating the initial margins in a class of derivatives after an agreement has already been reached. Moreover, the rules on additional haircuts have been eased. Like in the EU, an additional discount of 8% will no longer have to be applied in the future if variation margins paid in cash are not in the agreed currency.

In addition, the clearing duty exception for occupational pension schemes and investment foundations has been extended by one year to 16 August 2018, whereby that deadline may be prolonged. The transitional period for recording and disclosing the transactions of participants on a trading venue and securities dealers has also been extended by nine months, i.e. to 1 October 2018. However, the recording and disclosure must be carried out with retroactive effect to 1 January 2018.

New requirements for the restructuring and resolution of central counterparties are currently being prepared at the international level. Furthermore, efforts are under way in the EU to adjust parts of the European Market Infrastructure Regulation (EMIR) on OTC derivatives, central counterparties and trade repositories. The Federal Council is monitoring these developments closely and will swiftly make any necessary adjustments to prevent competitive disadvantages for Swiss financial market participants.

Address for enquiries

Anne Césard, Communications, State Secretariat for International Financial Matters SIF
Tel. +41 58 462 62 91, anne.cesard@sif.admin.ch