The Swiss Financial Market Supervisory Authority FINMA is introducing a clearing obligation for standardised interest-rate and credit derivatives traded over the counter (OTC). Consequently, it is supplementing Annex 1 of its Financial Market Infrastructure Ordinance (FMIO-FINMA), for which it is conducting a consultation exercise that will run until 12 February 2018.
FINMA is designating the categories of OTC derivatives that will for the first time be subject to a clearing obligation. It is modelling these categories on European law because Swiss-market derivatives are predominantly cross-border operations, often transacted with market participants whose registered offices are in the European Union. The clearing obligation will concern standardised OTC interest-rate and credit derivatives. Transitional periods ranging from 6 to 18 months, dating from the entry into force of the amended FMIO-FINMA, are applicablebefore compliance becomes mandatory. To enact these changes, FINMA is adding detail to Annex 1 of its Financial Market Infrastructure Ordinance and, for this reason, is conducting a consultation exercise running until 12 February 2018.
A central component of Swiss rules governing derivatives trading is the obligation to clear trades involving FINMA-designated categories of OTC derivatives through central counterparties that are either authorised or recognised by FINMA. OTC derivatives are derivative instruments that are not traded through a trading venue such as an exchange or a multilateral trading facility.
Vinzenz Mathys, Spokesperson
Tel. +41 (0)31 327 19 77