The legal basis for the authorisation of financial market infrastructures is primarily set out in the Financial Market Infrastructure Act (FMIA) and the associated ordinances.
Under Article 4 of the Financial Market Infrastructure Act (FMIA), anyone intending to operate a stock exchange or a multilateral trading facility in Switzerland must be authorised by FINMA. Stock exchanges are institutions for multilateral securities trading where securities are listed, whose purpose is the simultaneous exchange of bids between several participants and the conclusion of contracts based on non-discretionary rules (Art. 26 let. b FMIA).
Securities are standardised certificated and uncertificated securities, derivatives and intermediated securities, which are suitable for mass trading (Art. 2 let. b FMIA).
Self-regulation plays an important role in the regulation of trading venues (Art. 27 FMIA). Under the statutory rules, stock exchanges and trading venues must have their own independent regulatory and monitoring organisation appropriate to their activities. In the case of authorised stock exchanges and multi-lateral trading facilities, far-reaching monitoring functions are assumed by independent trading supervisory bodies. To this end, they issue regulations, which they submit to FINMA for approval.
In some markets, a central counterparty (CCP) acts as contracting party between buyer and seller and therefore becomes the legal contracting party between both sides of a contract. This has become a widespread international practice in stock exchange trading with shares.
To enable the central counterparty to settle transactions in both directions in an orderly way, it requires deposits of collateral in the form of securities and cash from all trading members.
Exchange-traded securities are physically stored by an authorised central securities depository (CSD). Following a securities transaction, the depository transfers ownership of the securities in question from seller to buyer by means of booking orders.
In their function as depositories and settlers, CSDs must ensure that the number of securities deposited with them always matches the number of securities credited to their clients. They must also ensure that transactions such as interest and dividend payments and capital increases can be processed centrally.
Trade repositories collect and manage data on derivatives transactions and thus enhance transparency in the derivatives market.
Payment systems are facilities which settle and process payment obligations. They look after the settlement of the cash leg of a financial instrument transaction. Payment systems require FINMA authorisation only if this is necessary for the proper functioning of the financial market or the protection of financial market participants and if the payment system is not operated by a bank (Art. 4 para. 2 FMIA).