Focus on financial market infrastructures

The latest recovery plans of the systemically important financial market infrastructures (FMIs) SIX x-clear and SIX SIS show further improvements in FINMA’s view. However, as yet they do not meet all the requirements for approval. FINMA has also proposed its preferred resolution strategy for SIX x-clear.

SIX x-clear and SIX SIS have both improved their recovery plans. In particular, the FMIs further broadened their analysis of stress scenarios and provided information on how a majority of the scenarios could be addressed. As regards stabilisation measures, these should be designed in such a way that they can be implemented by the FMI at its own discretion and independently of the group. Overall, therefore, the plans do not yet meet the high bar that has been set for approval.

Preferred resolution strategy for SIX x-clear

FINMA is currently working on defining its preferred resolution strategy for SIX x-clear. This aims to temporarily continue the system-critical functions for a maximum of six months with a simultaneous complete wind-down of its business operations. The funding required for recapitalisation in the event of resolution and the wind-down can be raised through various instruments depending on the crisis scenario. SIX x-clear’s capital would be written off in all scenarios. On top of this, pre-financed funds reserved for resolution (i.e. gone concern funds) should be built up. Additionally, funding could be obtained from clearing members in the form of resolution cash calls or by writing down their claims, provided this does not jeopardise financial stability owing to procyclical effects.

Various prerequisites for the preferred resolution strategy, particularly the required regulatory basis, are still in the process of being reviewed or established.