FMIA Switzerland

FMIA Switzerland – Swiss Financial Market Infrastructure Act

FMIA (Financial Markets Infrastructure Act), also known as FinfraG (Finanzmarktinfrastrukturgesetz) Switzerland is the financial market infrastructure act regulating derivatives trading which is effective as of beginning 2016. FinfraG regulates the trading on trading venues as well the bilateral transactions, and is the equivalent to Dodd-Frank in the US and EMIR in the EU and is implementing the Pittsburgh G20 summit procedures for regulating derivatives trading.

Important notification as of 3rd of April 2017 FINMA approves SIX as a trade repository and recognises the european REGIS-TR. The recognition and approval of these two trade repositories triggers the date of the FMIA reporting obligation for the reporting derivative transactions to a transaction register as of 1 October 2017 earliest:
– from 1st of October 2017 if the counterparty which is required to report is a central counterparty (CCP) or a financial counterparty (FC) which is not small; (CCP/FC+)
– from 1st of January 2018 if the counterparty which is required to report is a small financial counterparty (FC-) or a non-financial counterparty (NFC) which is not small; (FC-/NFC+)
– from 1st of April 2018 in all other cases. However, transactions between two small non-financial counterparties (NFC-) do not have to be reported.

FMIA Consultation – preliminary consultation of FMIA during 2014-2015

End of March 2014, the consultation period for the new financial market infrastructure law has ended. In June, the responses to the hearing were published. Subsequently, the Federal Council approved beginning of September the message to FMIA. The economic commission of Switzerland has released details on the start of the detailed discussion (only available in german and french). The definition of financial counterparties is subject to in-depth discussion. For commodity derivatives, the position limits (equivalent to MiFID 2) have been discarded as the regulation is not yet defined in the EU. Exceptions for small non-financial counterparties in regards to transaction reporting and additional obligations were discarded. The second meeting of the economic commission was held on the 9th of February 2015. The majority of the derivatives traded in Switzerland are concluded with an EU-counterparty. Therefore, necessary adjustments with the EU regulation EMIR (and with the American regulation Dodd Frank) are required in order to maintain transparent access to the respective markets and to be compliant with the G20 requirements.

Mar 20, 2015:  Discussion during the national council’s spring session in 2015

During the spring session of the National Council (18.03-20.03.2015) the regulation has been reviewed. The discussion paper with requests by the majority / minority, can be downloaded here (in german). The national council has approved the regulation on the 20th of March 2015, with minor amendments. The inofficial english version of FMIA/FinfraG can be downloaded here.

June 2, 2015:  Finalization on items such as the position limits for commodity derivatives 

FinfraG was treated at the summer session of the Council of States (on Tue, 06/02/2015). The content of the regulation remains essentially the same. Subject to discussions were the position limits and reporting requirements between small non-financial counterparties. The large chamber (the National Council) has declined  the position limits and reporting obligations for small non-financial counterparties in the subsequent consultation.

June, 19th 2015:  FMIA was adopted in the final vote

On the 19th of June, 2015 the regulation was adopted in the final vote. The Council of the States has agreed to the national council and transactions between small non-financial counterparties are not subject to the reporting requirement.

August 20th, 2015: FMIO – Financial markets ordinance was released

On 20th of August 2015, the ordinance of FinfraG (FinfraV) was released, and the consultation period lasts until 2nd of October 2015. For the first time, the implementation details are known in a draft status (counterparty classification thresholds, risk reduction obligations). The draft regulation can be found here. The counterparty thresholds are defined as 1.1Bn CHF for credit and equity derivatives, and with 3.3 billion CHF for FX, interest rate and commodity derivatives. The details of the threshold calculation have also been concretised. The confirmation of transactions, which were completed until 16.00/4pm, has to take place the next day. For small counterparties, this is extended by one day. For a dispute resolution, which lasts longer than 5 working days, a special process is required.

FINMA has also published Regulation FinfraV-FINMA as part of the FinfraV hearing. Key points of FinfraV-FINMA include the reporting requirement on trading venues for securities trading by FinfraG Art. 39, the criteria for OTC derivatives to be settled according to Art. 101 and the disclosure and takeover law.

November 25th, 2015 FMIA will be in force as of Jan 1st, 2016:

During its meeting on the 25th of November 2015, the Federal Council brought the Financial Market Infrastructure Act (FMIA) and the Financial Market Infrastructure Ordinance (FMIO) into force as of 1st of January 2016. Also, the final version of the ordinance has now been published as a preprint. The final version of FMIA (as of 19th of June 2015) in english is now downloadable here. For financial counterparties, the threshold is 8bn CHF. The transaction reporting obligation is introduced in gradual steps depending on the counterparty classification status. 

April 18th, 2016 Further details on SIMM:

ISDA has released further details on their bilateral IM model Standard Initial Margin Model (SIMM). FinfraG allows a schedule based calculation of the initial margin. Criteria for a sensitivity based model are defined by FINMA. Although many models can exist, SIMM targets for the market standard model for bilateral transactions.

Jun 5th, 2016: Asessment: How is Brexit affecting FinfraG and MiFID II?

Brexit MiFID II and FMIA obligations

7. Juni 2016: FINMA Next Steps: FINMA-Guidance 01/2016

FINMA-Guidance 01/2016

FinfraG Start Date / FinfraG Timetable

FinfraG is expected to come into force in early 2016, with gradually increasing obligations. For the start of the transaction reporting obligation, the entry into force is laid down in Art 127 FinfraG ordinance: after the recognition of the first trade repository by FINMA, within

  • 6 months, all open transactions need to be reported: transactions between a large financial counterparty as well centrally cleared transactions
  • 9 months, all open transactions are open at this time need to reported: transactions between a small financial counterparty and between a large non-financial counterparty
  • 12 months: all remaining transactions have to be reported

This implies that the transaction reporting obligation will come into effect during mid 2016. For transactions concluded over an OTF or a trading venue, these deadlines are extended by additional 6 months.

Overview of the Obligations in FinfraG


FMIA obligations

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How are you affected:


Overview FMIA

FMIA/FinfraG Switzerland: counterparty classifications and thresholds


The FMIA differs between 4 counterparty classifications (EMIR between 3). In comparison with the EU regulation, an additional category has been introduced which is small financial counterparties. This exempts smaller financial counterparties from connecting to a central counterparty. This is similar to the end user exception of Dodd Frank regulation in the United States. Also, intra-group transactions will not be subject to authorization. The non-financial counterparties are not supervised by any authority. The control takes place with the auditors.

The thresholds for counterparty classifications are not known yet. It is expected however, that the thresholds will be similar to the Dodd Frank and EMIR.

Overview of obligations for different counterparty types:

finfrag, counterparties, finfrag switzerland


FMIA Switzerland: changes in detail

The following requirements are mandatory for all market participants:

Reporting all derivative trades to a trade repository.


Foreign trade repositories can be approved under certain circumstances. In Switzerland, SIX has recently announced that they will provide a TR-service. According to current knowledge, from mid-towards the end of 2015, all types of derivatives will be reported. Cash and spot transactions are excluded from FMIA. Derivatives contracts under FMIA are defined as trades where the value is derived from one  or more underlying assets and the delivery takes place later than 2 days or the generally accepted delivery time of each spot transaction in the market.

Risk mitigation measurments, which include:

  • timely confirmation of trades (Terms and Conditions). ISDA Trade Confirmations can be used, in case the asset class has ISDA templates.
  • Adequate procedures for portfolio reconciliation and portfolio compression
  • Processes and procedures for the early detection and resolution of disagreements

Additional requirements are only required for certain counterparties, from small financial counterparties:

  • Exchange of collateral

The following measures are necessary for financial counterparties and to large, non-financial, counterparties:

  • centralized clearing through a CCP (Central counterparty). Currency swaps, Futures and Forwards (=Termingeschäfte), are excluded from the clearing obligation, in case they are settled payment vs. payment.
  • Valuation of open positions
  • Use of electronic trading platforms