Ordinance
on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading
(Financial Market Infrastructure Ordinance, FinMIO)

(Art. 1 and 157 Fin­MIA)

This Or­din­ance gov­erns spe­cific­ally:

a.

the au­thor­isa­tion con­di­tions and du­ties for fin­an­cial mar­ket in­fra­struc­tures;

b.

the du­ties of fin­an­cial mar­ket par­ti­cipants in de­riv­at­ives trad­ing;

c.

the dis­clos­ure of share­hold­ings;

d.

pub­lic takeover of­fers;

e.

the ex­cep­tions that ap­ply with re­gard to the ban on in­sider trad­ing and mar­ket ma­nip­u­la­tion.

(Art. 2 lit. b and c Fin­MIA)

¹ Se­cur­it­ies are deemed to be stand­ard­ised and suit­able for mass trad­ing if they are pub­licly offered for sale in the same struc­ture and de­nom­in­a­tion or are placed with more than 20 cli­ents, in­so­far as they have not been cre­ated es­pe­cially for in­di­vidu­al coun­ter­parties.²

² De­riv­at­ives are deemed to com­prise fin­an­cial con­tracts whose price is de­rived spe­cific­ally from:

a.

as­sets such as shares, bonds, com­mod­it­ies and pre­cious metals;

b.

ref­er­ence val­ues such as cur­ren­cies, in­terest rates and in­dices.

³ The fol­low­ing are not deemed to be de­riv­at­ives:

a.

spot trans­ac­tions;

b.

de­riv­at­ives trans­ac­tions re­lat­ing to elec­tri­city and gas which:

1.

are traded on an or­gan­ised trad­ing fa­cil­ity,

2.

must be phys­ic­ally de­livered, and

3.

can­not be settled in cash at a party's dis­cre­tion;

c.

de­riv­at­ives trans­ac­tions re­lat­ing to cli­mat­ic vari­ables, freight rates, in­fla­tion rates or oth­er of­fi­cial eco­nom­ic stat­ist­ics that are settled in cash only in the event of a de­fault or oth­er ter­min­a­tion event.

⁴ Spot trans­ac­tions are deemed to be trans­ac­tions that are settled either im­me­di­ately or fol­low­ing ex­piry of the de­ferred set­tle­ment dead­line with­in two busi­ness days. Spot trans­ac­tions are also deemed to be:

a.

trans­ac­tions that are settled with a longer set­tle­ment dead­line in ac­cord­ance with the mar­ket norm for the cur­rency pair in ques­tion;

b.

pur­chases or sales of se­cur­it­ies, ir­re­spect­ive of their cur­rency, which are paid for by the dead­line pre­scribed by the reg­u­lat­or or by a dead­line that is cus­tom­ary in the mar­ket;

c.

trans­ac­tions that are con­tinu­ously ex­ten­ded without there be­ing a leg­al ob­lig­a­tion or without such an ex­ten­sion between the parties be­ing usu­al.

(Art. 3 para. 2 Fin­MIA)

The func­tions of a group com­pany are sig­ni­fic­ant with re­spect to the activ­it­ies which re­quire au­thor­isa­tion if they are ne­ces­sary for the con­tinu­ation of im­port­ant busi­ness pro­cesses, in par­tic­u­lar in the areas of li­quid­ity man­age­ment, treas­ury, risk man­age­ment, mas­ter data ad­min­is­tra­tion and ac­count­ing, per­son­nel, in­form­a­tion tech­no­logy, trad­ing and set­tle­ment, and leg­al and com­pli­ance.

(Art. 4 and 5 Fin­MIA)

¹ The fin­an­cial mar­ket in­fra­struc­ture shall sub­mit an au­thor­isa­tion ap­plic­a­tion to the Swiss Fin­an­cial Mar­ket Su­per­vis­ory Au­thor­ity (FINMA). This shall con­tain all the in­form­a­tion ne­ces­sary for as­sess­ing it, spe­cific­ally in­form­a­tion on:

a.

the busi­ness area (Art. 6);

b.

the place of man­age­ment (Art. 7);

c.

cor­por­ate gov­ernance (Art. 8);

d.

risk man­age­ment (Art. 9);

e.

guar­an­tee of ir­re­proach­able busi­ness con­duct (Art. 10);

f.

min­im­um cap­it­al (Art. 13);

g.

cap­it­al ad­equacy and risk di­ver­si­fic­a­tion (Art. 48, 49, 56, 57 and 69);

h.

the audit firm (Art. 71).

² The fin­an­cial mar­ket in­fra­struc­ture shall at­tach along with its au­thor­isa­tion ap­plic­a­tion the ne­ces­sary doc­u­ment­a­tion, namely its art­icles of as­so­ci­ation or part­ner­ship agree­ments and reg­u­la­tions.

(Art. 7 Fin­MIA)

¹ The fin­an­cial mar­ket in­fra­struc­ture shall no­ti­fy FINMA in par­tic­u­lar of:

a.

any amend­ments to the art­icles of as­so­ci­ation or part­ner­ship agree­ments and reg­u­la­tions;

b.

any ma­ter­i­al change in the busi­ness activ­ity of a sub­si­di­ary, branch or rep­res­ent­a­tion abroad;

c.

any change in audit firm or in the com­pet­ent for­eign su­per­vis­ory au­thor­ity with re­spect to any sub­si­di­ary, branch or rep­res­ent­a­tion abroad.

² It may only re­port any changes in its art­icles of as­so­ci­ation to the com­mer­cial re­gister and put any changes in reg­u­la­tions in­to ef­fect fol­low­ing FINMA's ap­prov­al of the changes in ques­tion.

(Art. 8 para. 2 Fin­MIA)

¹ The fin­an­cial mar­ket in­fra­struc­ture must de­scribe its area of busi­ness in fac­tu­ally and geo­graph­ic­ally pre­cise terms in the art­icles of as­so­ci­ation, part­ner­ship agree­ments or reg­u­la­tions.

² The busi­ness area and its geo­graph­ic­al ex­tent must be in har­mony with the fin­an­cial mar­ket in­fra­struc­ture's fin­an­cial cap­ab­il­it­ies and ad­min­is­trat­ive or­gan­isa­tion.

(Art. 8 paras. 1 and 2 Fin­MIA)

¹ The fin­an­cial mar­ket in­fra­struc­ture must ef­fect­ively be man­aged from Switzer­land. An ex­cep­tion is made here for gen­er­al dir­ect­ives and de­cisions with­in the con­text of group su­per­vi­sion if the fin­an­cial mar­ket in­fra­struc­ture forms part of a fin­an­cial group that is sub­ject to ap­pro­pri­ate con­sol­id­ated su­per­vi­sion by a for­eign fin­an­cial mar­ket su­per­vis­ory au­thor­ity.

² The per­sons en­trus­ted with man­aging the fin­an­cial mar­ket in­fra­struc­ture must be res­id­ent in a place from which they can ef­fect­ively ex­er­cise such man­age­ment.

(Art. 8 para. 2 Fin­MIA)

¹ The fin­an­cial mar­ket in­fra­struc­ture must have an or­gan­isa­tion­al struc­ture and an or­gan­isa­tion­al basis that set out the tasks, re­spons­ib­il­it­ies, powers and ac­count­ab­il­ity of the fol­low­ing bod­ies:

a.

body for busi­ness man­age­ment;

b.

body for gov­ernance, su­per­vi­sion and con­trol;

c.

in­tern­al audit func­tion.

² The body for gov­ernance, su­per­vi­sion and con­trol must com­prise at least three mem­bers. These may not be­long to the bod­ies de­scribed in para­graph 1 let­ters a and c.

³ The body for gov­ernance, su­per­vi­sion and con­trol shall set out the ba­sic risk man­age­ment prin­ciples and de­term­ine the risk tol­er­ance of the fin­an­cial mar­ket in­fra­struc­ture. This body shall have its work eval­u­ated reg­u­larly.

⁴ The fin­an­cial mar­ket in­fra­struc­ture shall define, im­ple­ment and main­tain a com­pens­a­tion policy that pro­motes sound and ef­fect­ive risk man­age­ment and does not cre­ate in­cent­ives to re­lax risk stand­ards.

⁵ It must have mech­an­isms in place that al­low it to es­tab­lish the needs of par­ti­cipants with re­gard to the ser­vices provided by the fin­an­cial mar­ket in­fra­struc­ture.

(Art. 8 para. 3 Fin­MIA)

¹ With re­gard to risk man­age­ment, the fin­an­cial mar­ket in­fra­struc­ture must have a concept for the in­teg­rated iden­ti­fic­a­tion, meas­ure­ment, man­age­ment and mon­it­or­ing of risks, par­tic­u­larly with re­spect to:

a.

leg­al risks;

b.

cred­it and li­quid­ity risks;

c.

mar­ket risks;

d.

op­er­a­tion­al risks;

e.

set­tle­ment risks;

f.

repu­ta­tion­al risks;

g.

gen­er­al busi­ness risks.

² It must have in­stru­ments in place and cre­ate in­cent­ives in or­der to en­sure that par­ti­cipants can con­tinu­ously man­age and lim­it the risks arising for them­selves or for the fin­an­cial mar­ket in­fra­struc­ture.

³ In­so­far as the fin­an­cial mar­ket in­fra­struc­ture has in­dir­ect par­ti­cipants and these are iden­ti­fi­able, it must also identi­fy, meas­ure, con­trol and mon­it­or the risks posed to the fin­an­cial mar­ket in­fra­struc­ture by these parties.

⁴ The in­tern­al doc­u­ment­a­tion of the fin­an­cial mar­ket in­fra­struc­ture on passing a res­ol­u­tion and the mon­it­or­ing of trans­ac­tions as­so­ci­ated with the risks should be de­signed in such a way that al­lows the audit firm to make a re­li­able as­sess­ment with re­spect to the busi­ness activ­ity.

⁵ The fin­an­cial mar­ket in­fra­struc­ture shall en­sure an ef­fect­ive in­tern­al con­trol sys­tem which, among oth­er things, guar­an­tees com­pli­ance with leg­al and in­tern­al com­pany rules and reg­u­la­tions (com­pli­ance func­tion).

⁶ The in­tern­al audit func­tion must sub­mit a re­port to the body with re­spons­ib­il­ity for gov­ernance, su­per­vi­sion and con­trol or to one of its com­mit­tees. It must have suf­fi­cient re­sources as well as un­res­tric­ted audit rights.

(Art. 9 paras. 2 and 3 Fin­MIA)

¹ The au­thor­isa­tion ap­plic­a­tion for a new fin­an­cial mar­ket in­fra­struc­ture must con­tain the fol­low­ing in­form­a­tion and doc­u­ment­a­tion in par­tic­u­lar on the mem­bers of the board and ex­ec­ut­ive man­age­ment in ac­cord­ance with Art­icle 9 para­graph 2 Fin­MIA and on the own­ers of a qual­i­fied par­ti­cip­a­tion in ac­cord­ance with Art­icle 9 para­graph 3 Fin­MIA:

a.

nat­ur­al per­sons:

1.

de­tails on na­tion­al­ity, dom­i­cile, qual­i­fied par­ti­cip­a­tions in oth­er com­pan­ies and any pending court or ad­min­is­trat­ive pro­ceed­ings,

2.

a cur­riculum vitae signed by the rel­ev­ant per­son,

3.

ref­er­ences,

4.

an ex­tract from the re­gister of crim­in­al con­vic­tions;

b.

com­pan­ies:

1.

the art­icles of as­so­ci­ation,

2.

an ex­tract from the com­mer­cial re­gister or an at­test­a­tion to this ef­fect,

3.

a de­scrip­tion of busi­ness activ­it­ies, the fin­an­cial situ­ation and, if ap­plic­able, the group struc­ture,

4.

de­tails on com­pleted and pending court or ad­min­is­trat­ive pro­ceed­ings.

² Per­sons hold­ing a qual­i­fied par­ti­cip­a­tion must make a de­clar­a­tion to FINMA stat­ing wheth­er they hold the par­ti­cip­a­tion in ques­tion for their own ac­count or on a fi­du­ciary basis for a third party, and wheth­er they have gran­ted op­tions or sim­il­ar rights with re­spect to this par­ti­cip­a­tion.

³ The fin­an­cial mar­ket in­fra­struc­ture must sub­mit to FINMA with­in 60 days of the end of the fin­an­cial year a list of all qual­i­fied par­ti­cipants in the fin­an­cial mar­ket in­fra­struc­ture. This list shall con­tain de­tails on the iden­tity and par­ti­cip­a­tion rate of all qual­i­fied par­ti­cipants as at the rel­ev­ant clos­ing date, as well as any changes re­l­at­ive to the pri­or-year clos­ing date. In ad­di­tion, the in­form­a­tion and doc­u­ment­a­tion set out in para­graph 1 is to be sub­mit­ted for any qual­i­fied par­ti­cipants be­ing re­por­ted for the first time.

(Art. 11 Fin­MIA)

¹ An out­sourcing situ­ation in ac­cord­ance with Art­icle 11 para­graph 1 Fin­MIA is deemed to ex­ist if the fin­an­cial mar­ket in­fra­struc­ture has com­mis­sioned a ser­vice pro­vider to in­de­pend­ently and per­man­ently provide an es­sen­tial ser­vice for the fin­an­cial mar­ket in­fra­struc­ture in ac­cord­ance with Art­icle 12.

² The fol­low­ing as­pects in par­tic­u­lar are to be ad­dressed in the agree­ment with the ser­vice pro­vider:

a.

the ser­vice to be out­sourced and the ser­vices of the ser­vice pro­vider;

b.

the re­spons­ib­il­it­ies and the re­cip­roc­al rights and du­ties, par­tic­u­larly the fin­an­cial mar­ket in­fra­struc­ture's rights of in­spec­tion, in­struc­tion and con­trol;

c.

the se­cur­ity re­quire­ments that must be ful­filled by the ser­vice pro­vider;

d.

the ser­vice pro­vider's ad­her­ence to the fin­an­cial mar­ket in­fra­struc­ture's busi­ness con­fid­en­ti­al­ity and, in­so­far as leg­ally pro­tec­ted data is provided to the ser­vice pro­vider, the ser­vice pro­vider's ad­her­ence to pro­fes­sion­al con­fid­en­ti­al­ity;

e.

the rights of in­spec­tion and ac­cess of the in­tern­al audit func­tion, the ex­tern­al audit firm, FINMA and – in the case of sys­tem­ic­ally im­port­ant fin­an­cial mar­ket in­fra­struc­tures – the Swiss Na­tion­al Bank (SNB).

³ The fin­an­cial mar­ket in­fra­struc­ture must ex­er­cise care in the se­lec­tion, in­struc­tion and con­trolling of the ser­vice pro­vider. It shall in­teg­rate the out­sourced ser­vice in­to its in­tern­al con­trol sys­tem and mon­it­or the ser­vices rendered by the ser­vice pro­vider on an on­go­ing basis.

⁴ Out­sourcing to for­eign coun­tries re­quires ap­pro­pri­ate tech­nic­al and or­gan­isa­tion­al meas­ures to en­sure the ob­serv­ance of pro­fes­sion­al con­fid­en­ti­al­ity and data pro­tec­tion in ac­cord­ance with Swiss law. Con­tract­ing parties of a fin­an­cial mar­ket in­fra­struc­ture whose data is to be sent to a ser­vice pro­vider abroad must be in­formed about this.

⁵ The fin­an­cial mar­ket in­fra­struc­ture, its in­tern­al audit func­tion, the ex­tern­al audit firm, FINMA and – in the case of sys­tem­ic­ally im­port­ant fin­an­cial mar­ket in­fra­struc­tures – the SNB must be able to in­spect and re­view the out­sourced ser­vice.

⁶ Para­graphs 1 to 5 do not ap­ply if a cent­ral se­cur­it­ies de­pos­it­ory out­sources some of its ser­vices or activ­it­ies to a tech­nic­al plat­form that con­nects se­cur­it­ies set­tle­ment sys­tems by way of provid­ing a pub­lic ser­vice. This kind of out­sourcing must be gov­erned by means of a ded­ic­ated reg­u­lat­ory and op­er­a­tion­al frame­work, which re­quires the ap­prov­al of FINMA.

(Art. 11 para. 1 Fin­MIA)

¹ Es­sen­tial ser­vices are deemed to be ser­vices that are ne­ces­sary for the con­tinu­ation of im­port­ant busi­ness pro­cesses, in par­tic­u­lar in the areas of li­quid­ity man­age­ment, treas­ury, risk man­age­ment, mas­ter data ad­min­is­tra­tion and ac­count­ing, per­son­nel, in­form­a­tion tech­no­logy, and leg­al and com­pli­ance.

² The fol­low­ing ser­vices are also deemed to be es­sen­tial:

a.

in the case of trad­ing ven­ues:

1.

all activ­it­ies con­duc­ted with the aim of en­sur­ing fair, ef­fi­cient and or­derly trad­ing,

2.

the op­er­at­ing of match­ing and mar­ket data dis­tri­bu­tion sys­tems;

b.

in the case of cent­ral coun­ter­parties:

1.

con­trac­tu­ally en­ter­ing in­to se­cur­it­ies trans­ac­tions or oth­er con­tracts in­volving fin­an­cial in­stru­ments between two par­ti­cipants or between one par­ti­cipant and an­oth­er cent­ral coun­ter­party,

2.

the es­tab­lish­ment of mech­an­isms re­lat­ing to the plan­ning for and pro­tec­tion against out­ages of par­ti­cipants or in­ter­op­er­ably as­so­ci­ated cent­ral coun­ter­parties, or re­lat­ing to the se­greg­a­tion of the po­s­i­tions of in­dir­ect par­ti­cipants and cli­ents of par­ti­cipants or to the trans­fer of po­s­i­tions to oth­er par­ti­cipants;

c.

in the case of cent­ral se­cur­it­ies de­pos­it­or­ies:

1.

the op­er­a­tion of a cent­ral cus­todi­an or se­cur­it­ies set­tle­ment sys­tem,

2.

the ini­tial re­cord­ing of se­cur­it­ies in a se­cur­it­ies ac­count,

3.

the re­con­cili­ation of hold­ings;

d.

in the case of trade re­pos­it­or­ies:

1.

the col­lec­tion, man­age­ment and re­ten­tion of the re­por­ted data,

2.

the pub­lic­a­tion of re­por­ted data,

3.

the grant­ing of ac­cess to re­por­ted data;

e.

in the case of pay­ment sys­tems:

1.

the ac­cept­ance and ex­e­cu­tion of par­ti­cipants' pay­ment or­ders,

2.

the man­age­ment of clear­ing ac­counts;

f.³

in the case of trad­ing fa­cil­it­ies for dis­trib­uted ledger tech­no­logy se­cur­it­ies (DLT trad­ing fa­cil­it­ies) that do not provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c of the Fin­MIA:

1.

all activ­it­ies con­duc­ted with the aim of en­sur­ing fair, ef­fi­cient and or­derly trad­ing,

2.

the op­er­at­ing of match­ing and mar­ket data dis­tri­bu­tion sys­tems;

g.⁴

in the case of DLT trad­ing fa­cil­it­ies that provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c of the Fin­MIA:

1.

the ser­vices un­der let­ter f,

2.

the cent­ral cus­tody of DLT se­cur­it­ies or the clear­ing and set­tle­ment of trans­ac­tions in DLT se­cur­it­ies,

3.

the ini­tial re­cord­ing of DLT se­cur­it­ies in a se­cur­it­ies ac­count,

4.

the re­con­cili­ation of hold­ings.

(Art. 12 Fin­MIA)

¹ The min­im­um cap­it­al shall amount to:

a.⁵

for trad­ing ven­ues: CHF 1 mil­lion;

b.

for cent­ral coun­ter­parties: CHF 10 mil­lion;

c.

for cent­ral se­cur­it­ies de­pos­it­or­ies: CHF 5 mil­lion;

d.

for trade re­pos­it­or­ies: CHF 500,000;

e.

for pay­ment sys­tems: CHF 1.5 mil­lion;

f.⁶

for DLT trad­ing fa­cil­it­ies that do not provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c of the Fin­MIA: CHF 1 mil­lion;

g.⁷

for DLT trad­ing fa­cil­it­ies that provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c of the Fin­MIA: CHF 5 mil­lion.

^1bis For trad­ing ven­ues and DLT trad­ing fa­cil­it­ies, where jus­ti­fied, FINMA can stip­u­late a min­im­um amount that is up to 50% high­er.⁸

² In the event of non-cash cap­it­al con­tri­bu­tions, the value of the as­sets brought in and the amount of the li­ab­il­it­ies shall be re­viewed by a li­censed audit firm. This also ap­plies when an ex­ist­ing com­pany is trans­formed in­to a fin­an­cial mar­ket in­fra­struc­ture.

(Art. 13 Fin­MIA)

¹ The strategy de­tailed in Art­icle 13 para­graph 1 Fin­MIA must be en­shrined in the com­pany or­gan­isa­tion and should reg­u­late in par­tic­u­lar:

a.

the tasks, re­spons­ib­il­it­ies and powers;

b.

the fre­quency of the re­view of the busi­ness im­pact ana­lys­is in ac­cord­ance with para­graph 2;

c.

re­port­ing, com­mu­nic­a­tion and train­ing.

² The fin­an­cial mar­ket in­fra­struc­ture shall pre­pare a busi­ness im­pact ana­lys­is which sets out the re­cov­ery point ob­ject­ive and the re­cov­ery time ob­ject­ive for the busi­ness pro­cesses that are ne­ces­sary for op­er­a­tions.

³ It shall set out the op­tions for the re­cov­ery of the busi­ness pro­cesses that are ne­ces­sary for op­er­a­tions.

⁴ The strategy de­tailed in Art­icle 13 para­graph 1 Fin­MIA must be ap­proved by the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

(Art. 14 Fin­MIA)

¹ The IT sys­tems must be set up in such a way that:

a.

the re­quire­ments of in­form­a­tion avail­ab­il­ity, in­teg­rity and con­fid­en­ti­al­ity can be ap­pro­pri­ately ful­filled with re­spect to the busi­ness activ­ity in ques­tion;

b.

re­li­able ac­cess con­trol is pos­sible;

c.

ar­range­ments are in place for identi­fy­ing se­cur­ity de­fi­cien­cies and be­ing able to re­spond to them ap­pro­pri­ately.

² The fin­an­cial mar­ket in­fra­struc­ture shall take ap­pro­pri­ate meas­ures to en­sure that busi­ness-rel­ev­ant data can be re­covered in the event of loss.

(Art. 17 Fin­MIA)

¹ The re­port that a fin­an­cial mar­ket in­fra­struc­ture must sub­mit to FINMA pri­or to com­men­cing activ­ity abroad must con­tain all the ne­ces­sary in­form­a­tion and doc­u­ment­a­tion for eval­u­at­ing the activ­ity in ques­tion, namely:

a.

a busi­ness plan that de­scribes in par­tic­u­lar the nature of the planned busi­nesses and the or­gan­isa­tion­al struc­ture;

b.

the ad­dress of the of­fice abroad;

c.

the names of the mem­bers of the board and ex­ec­ut­ive man­age­ment;

d.

the audit firm;

e.

the su­per­vis­ory au­thor­ity in the host coun­try.

² The fin­an­cial mar­ket in­fra­struc­ture must also no­ti­fy FINMA of:

a.

any dis­con­tinu­ation of busi­ness activ­ity abroad;

b.

any ma­ter­i­al change in the busi­ness activ­ity abroad;

c.

any change of audit firm;

d.

any change of su­per­vis­ory au­thor­ity in the host coun­try.

(Art. 18 Fin­MIA)

¹ Fair ac­cess is deemed not to be guar­an­teed in par­tic­u­lar if ex­cess­ively high or ob­ject­ively un­jus­ti­fied re­quire­ments are made, or if ex­cess­ive prices are de­man­ded for use of the ser­vices offered. Fee struc­tures should not be con­du­cive to dis­orderly mar­ket con­di­tions.

² The fin­an­cial mar­ket in­fra­struc­ture may make ac­cess con­di­tion­al upon ful­fil­ment of op­er­a­tion­al, tech­nic­al, fin­an­cial and leg­al re­quire­ments.

³ If it re­stricts ac­cess for reas­ons of ef­fi­ciency, FINMA shall con­sult the Com­pet­i­tion Com­mis­sion as part of its as­sess­ment.

(Art. 20 Fin­MIA)

If the dis­ad­vantaging of par­ti­cipants through con­flicts of in­terest can­not be ex­cluded with or­gan­isa­tion­al meas­ures, this should be dis­closed to par­ti­cipants.

(Art. 21 Fin­MIA)

The fin­an­cial mar­ket in­fra­struc­ture shall reg­u­larly pub­lish in ad­di­tion to the in­form­a­tion re­quired un­der Art­icle 21 Fin­MIA:

a.

the rules and pro­ced­ures that ap­ply to the op­er­a­tion of the fin­an­cial mar­ket in­fra­struc­ture, in­clud­ing the rights and du­ties of the fin­an­cial mar­ket in­fra­struc­ture and par­ti­cipants;

b.

the fees and prices that ap­ply to the ser­vices provided by the fin­an­cial mar­ket in­fra­struc­ture, in­clud­ing the con­di­tions for the grant­ing of dis­counts;

c.

the risks for par­ti­cipants as­so­ci­ated with the ser­vices provided;

d.

the cri­ter­ia for the sus­pen­sion and ex­clu­sion of a par­ti­cipant;

e.

the rules and pro­ced­ures that ap­ply in the event of a de­fault or out­age of a par­ti­cipant;

f.

the rules and pro­ced­ures re­quired in or­der to keep the col­lat­er­al, re­ceiv­ables and li­ab­il­it­ies of par­ti­cipants and in­dir­ect par­ti­cipants se­greg­ated from one an­oth­er, and the rules and pro­ced­ures re­quired for this col­lat­er­al, re­ceiv­ables and li­ab­il­it­ies to be both re­cor­ded and trans­ferred;

g.

the ag­greg­ated trans­ac­tion volumes and amounts;

h.

the num­ber, nom­in­al value and cur­rency of is­sue of the se­cur­it­ies held in cent­ral cus­tody;

i.

oth­er in­form­a­tion in ac­cord­ance with re­cog­nised in­ter­na­tion­al stand­ards.

(Art. 24 Fin­MIA)

¹ The re­cov­ery plan and the res­ol­u­tion plan must take in­to ac­count the reg­u­la­tions of for­eign su­per­vis­ory au­thor­it­ies and cent­ral banks for sta­bil­isa­tion, re­struc­tur­ing and wind­ing-up.

² The re­cov­ery plan shall in par­tic­u­lar de­scribe the meas­ures to be taken and the re­sources re­quired for their im­ple­ment­a­tion. It must be ap­proved by the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

³ The fin­an­cial mar­ket in­fra­struc­ture shall de­scribe, upon sub­mis­sion of the plan, what meas­ures it is pre­par­ing or has already im­ple­men­ted to im­prove its resolv­ab­il­ity both in Switzer­land and abroad (Art. 21).

⁴ It shall sub­mit to FINMA an­nu­ally, and by the end of the second quarter of the year, the re­cov­ery plan and the in­form­a­tion re­quired for the res­ol­u­tion plan. The same doc­u­ments should also be sub­mit­ted if changes make a re­work­ing ne­ces­sary or if FINMA de­mands such a sub­mis­sion.

⁵ FINMA shall grant the fin­an­cial mar­ket in­fra­struc­ture an ap­pro­pri­ate peri­od for the pre­par­at­ory im­ple­ment­a­tion of the meas­ures en­vis­aged in the res­ol­u­tion plan.

(Art. 24 para. 1 Fin­MIA)

The meas­ures to im­prove the fin­an­cial mar­ket struc­ture's resolv­ab­il­ity can en­com­pass in par­tic­u­lar:

a.

struc­tur­al im­prove­ments and un­bund­ling by means of:

1.

amend­ments to the leg­al struc­ture to cre­ate busi­ness-aligned leg­al en­tit­ies,

2.

the cre­ation of leg­ally in­de­pend­ent ser­vice units,

3.

the elim­in­a­tion or min­im­isa­tion of de facto com­puls­ory gov­ern­ment sup­port, par­tic­u­larly by cre­at­ing an in­de­pend­ent man­age­ment struc­ture,

4.

the re­duc­tion of geo­graph­ic­al or bal­ance sheet asym­met­ries;

b.

fin­an­cial un­bund­ling to con­tain risks of con­ta­gion by means of:

1.

the re­duc­tion of cap­it­al par­ti­cip­a­tions between leg­al en­tit­ies at the same level,

2.

re­stric­tions on the grant­ing of un­se­cured loans and guar­an­tees between leg­al en­tit­ies at the same level with­in the fin­an­cial group,

3.

the cre­ation of an in­cent­ive struc­ture that gives rise to the highest pos­sible de­gree of mar­ket-con­sist­ent in­tra-group fin­an­cing;

c.

op­er­a­tion­al un­bund­ling to safe­guard data and en­sure con­tinu­ation of im­port­ant op­er­a­tion­al ser­vices by means of:

1.

en­sur­ing ac­cess to and use of data re­sources, data­bases and IT re­sources,

2.

the sep­ar­a­tion or per­man­ent out­sourcing of key func­tions,

3.

ac­cess to and con­tin­ued use of sys­tems es­sen­tial to busi­ness op­er­a­tions.

(Art. 26 and 42 Fin­MIA)

Trad­ing is deemed to be mul­ti­lat­er­al if it unites the in­terests of mul­tiple par­ti­cipants in the ac­quis­i­tion and sale of se­cur­it­ies or oth­er fin­an­cial in­stru­ments with­in the trad­ing fa­cil­ity with a view to con­clud­ing a con­tract.

(Art. 26 and 42 Fin­MIA)

Rules are deemed to be non-dis­cre­tion­ary if they grant the trad­ing ven­ue or the op­er­at­or of an or­gan­ised trad­ing fa­cil­ity no dis­cre­tion in the am­al­gam­a­tion of of­fers.

(Art. 27 Fin­MIA)

¹ An ap­pro­pri­ate reg­u­lat­ory and su­per­vis­ory or­gan­isa­tion shall en­com­pass the fol­low­ing bod­ies in par­tic­u­lar:

a.

a body that ful­fils reg­u­lat­ory tasks;

b.⁹

a body that ful­fils su­per­vis­ory tasks;

c.

a body re­spons­ible for the ad­mis­sion of se­cur­it­ies to trad­ing;

d.

an ap­peal body.

² The body that ful­fils the reg­u­lat­ory tasks of the trad­ing ven­ue must be in­de­pend­ent of the busi­ness man­age­ment of the trad­ing ven­ue and largely in­de­pend­ent of the par­ti­cipants and is­suers, both or­gan­isa­tion­ally and with re­spect to per­son­nel. It must have suf­fi­cient or­gan­isa­tion­al, per­son­nel and fin­an­cial re­sources.¹⁰

^2bis The body that ful­fils the su­per­vis­ory tasks of the trad­ing ven­ue must be in­de­pend­ent of the busi­ness man­age­ment of the trad­ing ven­ue and in­de­pend­ent of the par­ti­cipants and is­suers, both or­gan­isa­tion­ally and with re­spect to per­son­nel. It must have suf­fi­cient or­gan­isa­tion­al, per­son­nel and fin­an­cial re­sources.¹¹

³ Both is­suers and in­vestors must be ap­pro­pri­ately rep­res­en­ted in the body re­spons­ible for the ad­mis­sion of se­cur­it­ies to trad­ing.

⁴ The trad­ing ven­ue shall set out in its reg­u­la­tions the tasks and powers of the vari­ous bod­ies, as well as the rep­res­ent­a­tion of is­suers and in­vestors in the body that is re­spons­ible for the ad­mis­sion of se­cur­it­ies to trad­ing.

(Art. 27 para. 4 Fin­MIA)

¹ When ap­prov­ing reg­u­la­tions, FINMA shall re­view in par­tic­u­lar wheth­er these:

a.

en­sure trans­par­ency and the equal treat­ment of in­vestors; and

b.

en­sure the prop­er func­tion­ing of the se­cur­it­ies mar­kets.

² FINMA may con­sult the Com­pet­i­tion Com­mis­sion be­fore mak­ing its de­cision. The lat­ter shall give its opin­ion on wheth­er the reg­u­la­tions are neut­ral in terms of com­pet­i­tion and are con­du­cive to anti-com­pet­it­ive ar­range­ments or not.

(Art. 28 Fin­MIA)

The trad­ing ven­ue shall es­tab­lish pro­ced­ures in or­der that the rel­ev­ant data on se­cur­it­ies trans­ac­tions can be con­firmed on the same day that trans­ac­tions are ex­ecuted.

(Art. 29 paras. 1 and 3 lit. b Fin­MIA)

¹ The trad­ing ven­ue shall pub­lish the in­form­a­tion com­mu­nic­ated via its trad­ing fa­cil­it­ies on pre-trade trans­par­ency for shares throughout nor­mal trad­ing hours.

² For each share, the five best bid and of­fer prices as well as the volume of or­ders are to be pub­lished.

³ Para­graphs 1 and 2 also ap­ply for ac­tion­able in­dic­a­tions of in­terest.

⁴ The trad­ing ven­ue may make pro­vi­sion for ex­cep­tions in its reg­u­la­tions for:

a.

ref­er­ence price sys­tems, as long as the ref­er­ence prices are widely pub­lished and viewed by par­ti­cipants as re­li­able;

b.

sys­tems that ex­ist only to form­al­ise trans­ac­tions already ne­go­ti­ated;

c.

or­ders held in an or­der man­age­ment fa­cil­ity of the trad­ing ven­ue pending dis­clos­ure;

d.

or­ders that are large in scale com­pared with nor­mal mar­ket size.

(Art. 29 paras. 2 and 3 lit. b Fin­MIA)

¹ The trad­ing ven­ue shall pub­lish the in­form­a­tion on post-trade trans­par­ency with re­spect to trans­ac­tions ex­ecuted via the trad­ing ven­ue in ac­cord­ance with its reg­u­la­tions.

² Post-trade in­form­a­tion with re­spect to trans­ac­tions that were car­ried out on the trad­ing ven­ue out­side of nor­mal busi­ness hours are to be pub­lished by the trad­ing ven­ue pri­or to the start of trad­ing on the trad­ing day fol­low­ing ex­e­cu­tion of the trans­ac­tion in ques­tion.

³ Para­graph 1 also ap­plies to trans­ac­tions that were con­duc­ted out­side of the trad­ing ven­ue in­so­far as they were car­ried out dur­ing the course of the trad­ing day on the most im­port­ant mar­ket for the se­cur­it­ies in ques­tion or dur­ing the nor­mal trad­ing hours of the trad­ing ven­ue. Oth­er­wise, the in­form­a­tion is to be pub­lished im­me­di­ately pri­or to the be­gin­ning of the or­din­ary trad­ing hours of the trad­ing ven­ue, or at the latest pri­or to the start of the next trad­ing day on the most im­port­ant mar­ket for these se­cur­it­ies.

⁴ The trad­ing ven­ue may make pro­vi­sion for later pub­lic­a­tion in its reg­u­la­tions in the case of:

a.

large-volume trans­ac­tions in ac­cord­ance with Art­icle 27 para­graph 4 let­ter d;

b.

trans­ac­tions:

1.

which are above a size spe­cif­ic to the se­cur­it­ies in ques­tion,

2.

for which a li­quid­ity pro­vider would be ex­posed to in­ap­pro­pri­ate risks, and

3.

for which con­sid­er­a­tion has been giv­en as to wheth­er the con­tract­ing parties are re­tail or whole­sale in­vestors;

c.

trans­ac­tions in se­cur­it­ies for which no li­quid mar­ket ex­ists.

(Art. 29 para. 3 lit. b Fin­MIA)

¹ Se­cur­it­ies trans­ac­tions are not sub­ject to the pro­vi­sions on pre-trade and post-trade trans­par­ency if they are car­ried out as part of pub­lic tasks and not for in­vest­ment pur­poses, namely on the part of:

a.

the Con­fed­er­a­tion, can­tons or com­munes;

b.

the SNB;

c.

the Bank for In­ter­na­tion­al Set­tle­ments (BIS);

d.

mul­ti­lat­er­al de­vel­op­ment banks in ac­cord­ance with Art­icle 63 para­graph 2 let­ter c of the Cap­it­al Ad­equacy Or­din­ance of 1 June 2012¹² (CAO).

² Se­cur­it­ies trans­ac­tions car­ried out by the fol­low­ing parties may be ex­cluded from the pro­vi­sions on pre-trade and post-trade trans­par­ency as long as the trans­ac­tions are car­ried out as part of pub­lic tasks and not for in­vest­ment pur­poses, and as long as re­cip­roc­al rights are gran­ted and an ex­cep­tion does not stand in con­tra­dic­tion to the le­gis­lat­ive pur­pose:

a.

for­eign cent­ral banks;

b.

the European Cent­ral Bank (ECB);

c.

of­fi­cial bod­ies or state de­part­ments that are re­spons­ible for or in­volved in ad­min­is­ter­ing the na­tion­al debt;

d.

the European Fin­an­cial Sta­bil­ity Fa­cil­ity (EF­SF);

e.

the European Sta­bil­ity Mech­an­ism (ESM).

³ The Fed­er­al De­part­ment of Fin­ance (FDF) shall pub­lish a list of the bod­ies covered by para­graph 2.

⁴ The trad­ing ven­ue is to be in­formed in cases where trans­ac­tions are car­ried out as part of pub­lic tasks and not for in­vest­ment pur­poses.

(Art. 30 Fin­MIA)

¹ The trad­ing ven­ue shall set trans­par­ent rules and pro­ced­ures for fair, ef­fi­cient and or­derly trad­ing, as well as ob­ject­ive cri­ter­ia for the ef­fect­ive ex­e­cu­tion of or­ders. It must have meas­ures in place to en­sure the ro­bust man­age­ment of tech­nic­al pro­cesses and the op­er­a­tion of its sys­tems.

² It must pos­sess ef­fect­ive sys­tems, pro­ced­ures and ar­range­ments to en­sure in par­tic­u­lar that its trad­ing fa­cil­it­ies:

a.

are ro­bust and equipped with suf­fi­cient ca­pa­city to deal with peak volumes of or­ders and an­nounce­ments;

b.

are in a po­s­i­tion to en­sure or­derly trad­ing un­der con­di­tions of severe mar­ket stress;

c.

are sub­ject to ef­fect­ive emer­gency meas­ures so that the res­tor­a­tion of busi­ness op­er­a­tions can be guar­an­teed in the event of dis­rup­tions to its trad­ing fa­cil­it­ies;

d.

re­ject or­ders that ex­ceed pre-de­term­ined volume and price thresholds or are clearly er­ro­neous;

e.

are in a po­s­i­tion to sus­pend or re­strict trad­ing tem­por­ar­ily if there are sig­ni­fic­ant short-term price move­ments with re­spect to a se­cur­ity on that mar­ket or a re­lated mar­ket;

f.

are in a po­s­i­tion to can­cel, amend or cor­rect any trans­ac­tion in ex­cep­tion­al cases; and

g.

are reg­u­larly re­viewed with a view to en­sur­ing that the re­quire­ments un­der let­ters a to f are met.

³ It must enter in­to an agree­ment, in writ­ing or in an­oth­er form that that al­lows for its proof by text, with all par­ti­cipants hold­ing a spe­cial func­tion, in par­tic­u­lar par­ti­cipants that pur­sue a mar­ket-mak­ing strategy in the trad­ing ven­ue. It shall main­tain sys­tems and pro­ced­ures that en­sure that these par­ti­cipants com­ply with the reg­u­la­tions.¹³

⁴ It may also pre­scribe in its reg­u­la­tions that par­ti­cipants must flag up short-selling po­s­i­tions in its trad­ing fa­cil­ity.

(Art. 30 Fin­MIA)

¹ The trad­ing ven­ue must be able to identi­fy the fol­low­ing:

a.

or­ders gen­er­ated by al­gorithmic trad­ing;

b.

the dif­fer­ent al­gorithms used for the cre­ation of or­ders;

c.

the par­ti­cipants' deal­ers who ini­ti­ated these or­ders in the trad­ing fa­cil­ity.

² It shall re­quire par­ti­cipants that pur­sue al­gorithmic trad­ing to flag the or­ders gen­er­ated in this man­ner, re­cord all entered or­ders, in­clud­ing or­der can­cel­la­tions, and in par­tic­u­lar to pos­sess ef­fect­ive pre­cau­tions and risk con­trols that en­sure that their sys­tems:

a.

are ro­bust and equipped with suf­fi­cient ca­pa­city to deal with peak volumes of or­ders and an­nounce­ments;

b.

are sub­ject to ap­pro­pri­ate trad­ing thresholds and up­per lim­its;

c.

do not cause or con­trib­ute to any dis­rup­tions in the trad­ing ven­ue;

d.

are ef­fect­ive for pre­vent­ing vi­ol­a­tions of Art­icles 142 and 143 Fin­MIA;

e.

are sub­ject to ap­pro­pri­ate tests of al­gorithms and con­trol mech­an­isms, in­clud­ing pre­cau­tions to:

1.

lim­it the pro­por­tion of un­ex­ecuted trad­ing or­ders re­l­at­ive to the num­ber of trans­ac­tions that can be entered in­to the sys­tem by a par­ti­cipant,

2.

slow down the flow of or­ders if there is a risk of the ca­pa­city of the sys­tem be­ing reached, and

3.

lim­it and en­force the min­im­um tick size that may be ex­ecuted on the trad­ing ven­ue.

³ In or­der to take ac­count of the ad­di­tion­al bur­den on sys­tem ca­pa­city, the trad­ing ven­ue may make pro­vi­sion for high­er fees for:

a.

the place­ment of or­ders that are later can­celled;

b.

par­ti­cipants pla­cing a high pro­por­tion of can­celled or­ders;

c.

par­ti­cipants with:

1.

an in­fra­struc­ture in­ten­ded to min­im­ise delays in or­der trans­fer,

2.

a sys­tem that can de­cide on or­der ini­ti­ation, gen­er­a­tion, rout­ing or ex­e­cu­tion, and

3.

a high in­tra­day num­ber of price of­fers, or­ders or can­cel­la­tions.

(Art. 31 para. 2 Fin­MIA)

¹ The trad­ing su­per­vis­ory body must have ap­pro­pri­ate sys­tems and re­sources to carry out its tasks.

² The func­tion­ing of the trad­ing su­per­vis­ory sys­tems must also be guar­an­teed without re­stric­tion even in the event of high data volumes.

³ The trad­ing su­per­vis­ory body shall mon­it­or trad­ing in such a way that forms of con­duct in ac­cord­ance with Art­icles 142 and 143 Fin­MIA can be iden­ti­fied ir­re­spect­ive of wheth­er they are at­trib­ut­able to manu­al, auto­mated or al­gorithmic trad­ing.

(Art. 35 Fin­MIA)

¹ The stock ex­change shall guar­an­tee that all se­cur­it­ies ad­mit­ted to trad­ing and all lis­ted se­cur­it­ies can be traded in a fair, ef­fi­cient and or­derly man­ner.

² In the case of de­riv­at­ives, it shall en­sure in par­tic­u­lar that the way in which de­riv­at­ives trad­ing is struc­tured fa­cil­it­ates or­derly pri­cing.

³ The stock ex­change shall take the ne­ces­sary meas­ures to re­view the se­cur­it­ies lis­ted and ad­mit­ted to trad­ing for their ful­fil­ment of the ad­mis­sion and list­ing re­quire­ments.

(Art. 36 Fin­MIA)

¹ The mul­ti­lat­er­al trad­ing fa­cil­ity shall guar­an­tee that all se­cur­it­ies ad­mit­ted to trad­ing can be traded in a fair, ef­fi­cient and or­derly man­ner.

² In the case of de­riv­at­ives, it shall en­sure in par­tic­u­lar that the way in which de­riv­at­ives trad­ing is struc­tured fa­cil­it­ates or­derly pri­cing.

³ The mul­ti­lat­er­al trad­ing fa­cil­ity shall take the ne­ces­sary meas­ures to re­view the se­cur­it­ies ad­mit­ted to trad­ing for their ful­fil­ment of the ad­mis­sion re­quire­ments.

(Art. 37 paras. 1 to 3 Fin­MIA)

¹ The ap­peal body shall be in­de­pend­ent in its ad­ju­dic­a­tion and bound only by the law.

² The mem­bers may not be­long to the body re­spons­ible for the ad­mis­sion of se­cur­it­ies to trad­ing, nor may they be in an em­ploy­ment re­la­tion­ship or any oth­er con­trac­tu­al re­la­tion­ship with the trad­ing ven­ue that could lead to con­flicts of in­terest.

³ The pro­vi­sions of the Fed­er­al Su­preme Court Act of 17 June 2005¹⁴ on re­cus­al ap­ply to the mem­bers of the in­de­pend­ent ap­peal body.

⁴ The reg­u­la­tions con­cern­ing the in­de­pend­ent ap­peal body shall con­tain guidelines with re­spect to com­pos­i­tion, elec­tion, or­gan­isa­tion and pro­ceed­ings be­fore the ap­peal body.

(Art. 38 Fin­MIA)

¹ The par­ti­cipants ad­mit­ted to a trad­ing ven­ue shall keep a re­cord of all or­ders they re­ceive and all se­cur­it­ies trans­ac­tions they ex­ecute.

² The re­cord-keep­ing duty also ap­plies to or­ders and trans­ac­tions in de­riv­at­ives whose un­der­ly­ing in­stru­ments are se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue.

³ The re­cord-keep­ing duty ap­plies not only to trans­ac­tions on own ac­count, but also to trans­ac­tions ex­ecuted on be­half of a cli­ent.

⁴ FINMA shall reg­u­late what in­form­a­tion is ne­ces­sary and in what form it must be re­cor­ded.

(Art. 39 Fin­MIA)

¹ The par­ti­cipants ad­mit­ted to a trad­ing ven­ue shall re­port all trans­ac­tions they ex­ecute in­volving se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue. In par­tic­u­lar, the fol­low­ing must be re­por­ted:

a.

the name and num­ber of pur­chased or sold se­cur­it­ies;

b.

the volume, date and time of the trans­ac­tion;

c.

the price; and

d.

the de­tails ne­ces­sary to identi­fy the be­ne­fi­cial own­er.

² The re­port­ing duty also ap­plies to trans­ac­tions in de­riv­at­ives whose un­der­ly­ing in­stru­ments are se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue.

³ The re­port­ing duty ap­plies not only to trans­ac­tions on own ac­count, but also to trans­ac­tions ex­ecuted on be­half of a cli­ent.

⁴ The fol­low­ing trans­ac­tions ex­ecuted abroad do not have to be re­por­ted:

a.

trans­ac­tions in se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue in Switzer­land and in de­riv­at­ives with such se­cur­it­ies as their un­der­ly­ing in­stru­ments, provided the in­form­a­tion in ques­tion is reg­u­larly com­mu­nic­ated to the trad­ing ven­ue on the basis of an agree­ment in ac­cord­ance with Art­icle 32 para­graph 3 Fin­MIA or with­in the frame­work of an ex­change of in­form­a­tion between FINMA and the com­pet­ent for­eign su­per­vis­ory au­thor­ity if:

1.

they were ex­ecuted by the branch of a Swiss se­cur­it­ies firm¹⁵ or by a for­eign ad­mit­ted par­ti­cipant, and

2.

the branch or the for­eign par­ti­cipant is au­thor­ised to trade by the rel­ev­ant for­eign su­per­vis­ory au­thor­ity and is ob­liged to sub­mit a re­port in the cor­res­pond­ing state or in its state of dom­i­cile;

b.

trans­ac­tions in for­eign se­cur­it­ies ad­mit­ted to trad­ing on a trad­ing ven­ue in Switzer­land and in de­riv­at­ives with such se­cur­it­ies as their un­der­ly­ing in­stru­ments that are ex­ecuted on a re­cog­nised for­eign trad­ing ven­ue.

⁵ Third parties may be in­volved in re­port­ing.

(Art. 43 para. 1 Fin­MIA)

The au­thor­isa­tion and re­cog­ni­tion con­di­tions that ap­ply to the op­er­at­or of an or­gan­ised trad­ing fa­cil­ity are based on the fin­an­cial mar­ket acts pur­su­ant to Art­icle 1 para­graph 1 of the Fin­an­cial Mar­ket Su­per­vi­sion Act of 22 June 2007¹⁶.

(Art. 44 Fin­MIA)

¹ The op­er­at­or of an or­gan­ised trad­ing fa­cil­ity shall is­sue reg­u­la­tions on the or­gan­isa­tion of trad­ing and mon­it­or com­pli­ance with the stat­utory and reg­u­lat­ory pro­vi­sions, as well as the trad­ing pro­cess.

² It shall keep a chro­no­lo­gic­al re­cord of all or­ders and trans­ac­tions car­ried out through the or­gan­ised trad­ing fa­cil­ity.

³ In the event of agree­ments be­ing made ac­cord­ing to dis­cre­tion­ary rules, identic­al cli­ent or­ders may be matched only if best ex­e­cu­tion can be guar­an­teed. Ex­cep­tions are per­miss­ible only if the cli­ents con­cerned have ex­pressly waived any claim to best pos­sible ex­e­cu­tion.

(Art. 45 Fin­MIA)

The op­er­at­or of an or­gan­ised trad­ing fa­cil­ity shall set trans­par­ent rules and pro­ced­ures for fair, ef­fi­cient and or­derly trad­ing, as well as ob­ject­ive cri­ter­ia for the ef­fect­ive ex­e­cu­tion of or­ders. It must have meas­ures in place to en­sure the ro­bust man­age­ment of tech­nic­al pro­cesses and the op­er­a­tion of its sys­tems in ac­cord­ance with Art­icle 30 para­graphs 2 to 4.

(Art. 45 Fin­MIA)

In or­der to pre­vent dis­rup­tions to its trad­ing fa­cil­ity, the op­er­at­or of an or­gan­ised trad­ing fa­cil­ity must take ef­fect­ive meas­ures in ac­cord­ance with Art­icle 31.

(Art. 46 paras. 2 and 3 Fin­MIA)

¹In the case of mul­ti­lat­er­al trad­ing and bi­lat­er­al trad­ing where a li­quid mar­ket ex­ists, Art­icles 27 and 29 ap­ply by ana­logy.

² In the case of bi­lat­er­al trad­ing where no li­quid mar­ket ex­ists, price quotes on de­mand shall suf­fice.

(Art. 46 paras. 1 and 2 Fin­MIA)

¹ In the case of mul­ti­lat­er­al trad­ing, Art­icle 28 para­graphs 1 and 4 as well as Art­icle 29 ap­ply by ana­logy.

² In the case of bi­lat­er­al trad­ing, ag­greg­ated pub­lic­a­tion at the end of the trad­ing day shall suf­fice.

(Art. 48 Fin­MIA)

The cent­ral coun­ter­party shall en­sure, in par­tic­u­lar, the stand­ard­ised re­cord­ing of all de­tails of the trans­ac­tions cleared by it, the po­s­i­tions of the par­ti­cipants and its re­ports to trade re­pos­it­or­ies.

(Art. 8, 13 and 14 Fin­MIA)

¹ The cent­ral coun­ter­party must ap­point a risk com­mit­tee that in­cludes rep­res­ent­at­ives of the par­ti­cipants, of the in­dir­ect par­ti­cipants and mem­bers of the body for gov­ernance, su­per­vi­sion and con­trol. This com­mit­tee shall ad­vise the cent­ral coun­ter­party on all mat­ters that could have an im­pact on the risk man­age­ment of the cent­ral coun­ter­party.

² The cent­ral coun­ter­party shall ar­range pro­ced­ures, ca­pa­city plan­ning and suf­fi­cient ca­pa­city re­serves so that, in the event of a dis­rup­tion, its sys­tems can still pro­cess all trans­ac­tions still open by the close of trad­ing.

(Art. 49 Fin­MIA)

¹ If pre­defined thresholds are ex­ceeded, the cent­ral coun­ter­party shall call in ini­tial mar­gins and vari­ation mar­gins at least once a day.

² It shall avoid con­cen­tra­tion risks in the col­lat­er­al and shall en­sure that it can have prompt ac­cess to the col­lat­er­al.

³ It shall make pro­vi­sion for pro­ced­ures by means of which it can re­view the mod­els and para­met­ers on which its risk man­age­ment is based, and shall con­duct these re­views on a reg­u­lar basis.

⁴ If the cent­ral coun­ter­party holds its own as­sets or the col­lat­er­al and as­sets of par­ti­cipants with third parties, it shall min­im­ise the as­so­ci­ated risks. In par­tic­u­lar, it shall hold the col­lat­er­al and as­sets with cred­it­worthy fin­an­cial in­ter­me­di­ar­ies which, in­so­far as pos­sible, are sub­ject to su­per­vi­sion.

(Art. 50 Fin­MIA)

The cent­ral coun­ter­party shall en­able par­ti­cipants to elim­in­ate their prin­cip­al risk by en­sur­ing that the set­tle­ment of one ob­lig­a­tion oc­curs if and only if the set­tle­ment of the oth­er ob­lig­a­tion is guar­an­teed.

(Art. 51 Fin­MIA)

¹ The cent­ral coun­ter­party must hold total cap­it­al in the amount 8.0% (min­im­um cap­it­al re­quire­ment) to un­der­pin cred­it risks, non-coun­ter­party-re­lated risks, mar­ket risks and op­er­a­tion­al risks in ac­cord­ance with Art­icle 42 CAO¹⁷. FINMA may de­mand ad­di­tion­al cap­it­al in ac­cord­ance with Art­icle 45 CAO. Titles 1 to 3 CAO ap­ply to the cal­cu­la­tion.¹⁸

² The ded­ic­ated cap­it­al in ac­cord­ance with Art­icle 53 para­graph 2 let­ter c Fin­MIA shall amount to at least 25% of the re­quired cap­it­al set out in Title 3 CAO.

³ The cent­ral coun­ter­party shall hold fur­ther cap­it­al in or­der to cov­er the costs of a vol­un­tary ces­sa­tion of busi­ness or re­struc­tur­ing. In the case of sys­tem­ic­ally im­port­ant cent­ral coun­ter­parties, this cap­it­al must suf­fice to im­ple­ment the plan set out in Art­icle 72, but must at least be suf­fi­cient to cov­er on­go­ing op­er­at­ing ex­pendit­ure for six months.

⁴ In spe­cial cases, FINMA can ease the re­quire­ments set out in the para­graphs 1 to 3 or im­pose more rig­or­ous re­quire­ments.

⁵ The cent­ral coun­ter­party must have a plan that sets out how fur­ther cap­it­al is to be pro­cured if its cap­it­al no longer ful­fils the re­quire­ments set out in para­graphs 1 to 4. The plan must be ap­proved by the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

⁶ If its cap­it­al falls short of 110% of the re­quire­ments set out in para­graphs 1 to 4, the cent­ral coun­ter­party shall im­me­di­ately in­form FINMA and its audit firm, and shall provide FINMA with a plan that sets out how the threshold can once again be ad­hered to.

(Art. 51 Fin­MIA)

The cent­ral coun­ter­party shall mon­it­or cred­it risks vis-à-vis an in­di­vidu­al coun­ter­party or a group of as­so­ci­ated coun­ter­parties based on the cal­cu­la­tion prin­ciples set out in Sec­tion 4 of Chapter 1 of Title 4 CAO¹⁹.

(Art. 52 Fin­MIA)

¹ The fol­low­ing are deemed to con­sti­tute li­quid­ity in a cur­rency as set out in Art­icle 52 para­graph 1 Fin­MIA:

a.

cash bal­ances in this cur­rency with a cent­ral bank or a cred­it­worthy fin­an­cial in­sti­tu­tion;

b.

cash bal­ances in oth­er cur­ren­cies that can be con­ver­ted in­to this cur­rency in a timely man­ner through for­eign ex­change trans­ac­tions;

c.

con­trac­tu­ally com­mit­ted and ap­proved un­se­cured lines of cred­it in this cur­rency with a cred­it­worthy fin­an­cial in­sti­tu­tion that can be used without any fur­ther cred­it de­cision;

d.

col­lat­er­al in ac­cord­ance with Art­icle 49 Fin­MIA and as­sets that can be con­ver­ted in­to cash in this cur­rency in a timely man­ner through sales;

e.

col­lat­er­al in ac­cord­ance with Art­icle 49 Fin­MIA and as­sets that can be con­ver­ted in­to cash in this cur­rency in a timely man­ner by means of con­trac­tu­ally com­mit­ted and se­cured lines of cred­it or con­trac­tu­ally com­mit­ted repo lines with cent­ral banks or cred­it­worthy fin­an­cial in­sti­tu­tions.

² The cent­ral coun­ter­party shall reg­u­larly re­view com­pli­ance with the re­quire­ments set out in Art­icle 52 para­graph 1 Fin­MIA un­der vari­ous stress scen­ari­os. In do­ing so, it shall ap­ply col­lat­er­al dis­counts (hair­cuts) to the li­quid­ity that would be ap­pro­pri­ate even un­der ex­treme but plaus­ible mar­ket con­di­tions. It shall di­ver­si­fy its sources of li­quid­ity.

³ The in­vest­ment strategy of the cent­ral coun­ter­party must be in har­mony with its risk man­age­ment strategy. It must avoid con­cen­tra­tion risks.

(Art. 55 Fin­MIA)

¹ Port­ab­il­ity is en­sured if:

a.

the trans­fer is en­force­able in the rel­ev­ant jur­is­dic­tions; and

b.

the oth­er par­ti­cipant has an ob­lig­a­tion to­wards the in­dir­ect par­ti­cipant to as­sume the lat­ter's col­lat­er­al and po­s­i­tions.

² If a trans­fer can­not take place by the dead­line set by the cent­ral coun­ter­party, the cent­ral coun­ter­party may take all pre­cau­tions in ac­cord­ance with its reg­u­la­tions to act­ively man­age the risks with re­spect to the po­s­i­tions in ques­tion, in­clud­ing the li­quid­a­tion of as­sets and col­lat­er­al of the par­ti­cipant in de­fault who holds this for the ac­count of an in­dir­ect par­ti­cipant or its cli­ents.

(Art. 8 Fin­MIA)

¹ The cent­ral se­cur­it­ies de­pos­it­ory shall set up a user com­mit­tee for every se­cur­it­ies set­tle­ment sys­tem op­er­ated by it, on which the is­suers and par­ti­cipants in these se­cur­it­ies set­tle­ment sys­tems are rep­res­en­ted.

² The user com­mit­tee shall ad­vise the cent­ral se­cur­it­ies de­pos­it­ory in key mat­ters af­fect­ing is­suers and par­ti­cipants.

(Art. 62 Fin­MIA)

Cent­ral se­cur­it­ies de­pos­it­or­ies that use a com­mon set­tle­ment in­fra­struc­ture shall es­tab­lish identic­al times for:

a.

the entry of pay­ment and trans­fer or­ders in­to the sys­tem of the com­mon set­tle­ment in­fra­struc­ture;

b.

the ir­re­voc­ab­il­ity of pay­ment and trans­fer or­ders.

(Art. 64 Fin­MIA)

¹ The cent­ral se­cur­it­ies de­pos­it­ory must have suf­fi­cient col­lat­er­al in or­der to fully cov­er its cur­rent cred­it ex­pos­ure.

² It shall avoid con­cen­tra­tion risks in the col­lat­er­al and shall en­sure that it can have prompt ac­cess to the col­lat­er­al.

³ It shall make pro­vi­sion for pro­ced­ures by means of which it can re­view the mod­els and para­met­ers on which its risk man­age­ment is based, and shall con­duct these re­views on a reg­u­lar basis.

⁴ If it holds its own as­sets or the col­lat­er­al and as­sets of par­ti­cipants with third parties, it shall min­im­ise the as­so­ci­ated risks. In par­tic­u­lar, it shall hold the col­lat­er­al and as­sets with cred­it­worthy fin­an­cial in­ter­me­di­ar­ies which, in­so­far as pos­sible, are sub­ject to su­per­vi­sion.

(Art. 65 Fin­MIA)

The cent­ral se­cur­it­ies de­pos­it­ory shall en­able par­ti­cipants to elim­in­ate their prin­cip­al risk by en­sur­ing that the set­tle­ment of one ob­lig­a­tion oc­curs if and only if the set­tle­ment of the oth­er ob­lig­a­tion is guar­an­teed.

(Art. 66 Fin­MIA)

¹ The cent­ral se­cur­it­ies de­pos­it­ory must hold total cap­it­al in the amount 8.0% (min­im­um cap­it­al re­quire­ment) to un­der­pin cred­it risks, non-coun­ter­party-re­lated risks, mar­ket risks and op­er­a­tion­al risks in ac­cord­ance with Art­icle 42 CAO²⁰. FINMA may de­mand ad­di­tion­al cap­it­al in ac­cord­ance with Art­icle 45 CAO. Titles 1 to 3 CAO ap­ply to the cal­cu­la­tion.²¹

² For all oth­er mat­ters, Art­icle 48 para­graphs 3 to 6 ap­ply by ana­logy.

(Art. 66 Fin­MIA)

The cent­ral se­cur­it­ies de­pos­it­ory shall mon­it­or cred­it risks vis-à-vis an in­di­vidu­al coun­ter­party or a group of as­so­ci­ated coun­ter­parties based on the cal­cu­la­tion prin­ciples set out in Sec­tion 4 of Chapter 1 of Title 4 CAO²².

(Art. 67 Fin­MIA)

¹ The fol­low­ing are deemed to con­sti­tute li­quid­ity in a cur­rency as set out in Art­icle 67 para­graph 1 Fin­MIA:

a.

cash bal­ances in this cur­rency with a cent­ral bank or a cred­it­worthy fin­an­cial in­sti­tu­tion;

b.

cash bal­ances in oth­er cur­ren­cies that can be con­ver­ted in­to this cur­rency in a timely man­ner through for­eign ex­change trans­ac­tions;

c.

con­trac­tu­ally com­mit­ted and ap­proved un­se­cured lines of cred­it in this cur­rency with a cred­it­worthy fin­an­cial in­sti­tu­tion that can be used without any fur­ther cred­it de­cision;

d.

col­lat­er­al in ac­cord­ance with Art­icle 64 Fin­MIA and as­sets that can be con­ver­ted in­to cash in this cur­rency in a timely man­ner through sales;

e.

col­lat­er­al in ac­cord­ance with Art­icle 64 Fin­MIA and as­sets that can be con­ver­ted in­to cash in this cur­rency in a timely man­ner by means of con­trac­tu­ally com­mit­ted and se­cured lines of cred­it or con­trac­tu­ally com­mit­ted repo lines with cent­ral banks or cred­it­worthy fin­an­cial in­sti­tu­tions.

² The cent­ral se­cur­it­ies de­pos­it­ory shall reg­u­larly re­view com­pli­ance with the re­quire­ments set out in Art­icle 67 para­graph 1 Fin­MIA un­der vari­ous stress scen­ari­os. In do­ing so, it shall ap­ply col­lat­er­al dis­counts (hair­cuts) to the li­quid­ity that would be ap­pro­pri­ate even un­der ex­treme but plaus­ible mar­ket con­di­tions. It shall di­ver­si­fy its sources of li­quid­ity.

³ The in­vest­ment strategy of the cent­ral se­cur­it­ies de­pos­it­ory must be in har­mony with its risk man­age­ment strategy. It must avoid con­cen­tra­tion risks.

(Art. 73a para. 1 Fin­MIA)

The defin­i­tions for mul­ti­lat­er­al trad­ing and non-dis­cre­tion­ary rules un­der Art­icles 22 and 23 ap­ply by ana­logy to DLT trad­ing fa­cil­it­ies.

(Art. 73a para. 2 Fin­MIA)

¹ A DLT trad­ing fa­cil­ity is op­er­at­ing com­mer­cially if it:

a.

thereby gen­er­ates gross earn­ings of more than CHF 50,000 per cal­en­dar year;

b.

per cal­en­dar year, has a busi­ness re­la­tion­ship with more than 20 par­ti­cipants in ac­cord­ance with Art­icle 73c para­graph 1 let­ter e of the Fin­MIA (private par­ti­cipants) or with at least one par­ti­cipant in ac­cord­ance with Art­icle 73c para­graph 1 let­ters a to d of the Fin­MIA; or

c.

has un­lim­ited power of dis­pos­al over third-party DLT se­cur­it­ies that ex­ceed CHF 5 mil­lion at any giv­en time.

² If a threshold un­der para­graph 1 is ex­ceeded, the DLT trad­ing fa­cil­ity must re­port this to FINMA with­in 10 days. It must sub­mit an ap­plic­a­tion for au­thor­isa­tion as provided for in the Fin­MIA to FINMA with­in 60 days.

³ Provided the pro­tect­ive pur­pose of the Fin­MIA is not af­fected, FINMA may pro­hib­it the ap­plic­ant from ex­er­cising the activ­it­ies re­served to a DLT trad­ing fa­cil­ity un­til the de­cision is made on the ap­plic­a­tion for au­thor­isa­tion.

(Art. 73b Fin­MIA)

¹ Un­less oth­er­wise spe­cified in this Sec­tion, Art­icles 24 to 32 and Art­icle 35 ap­ply by ana­logy to DLT trad­ing fa­cil­it­ies.

² In­stead of the op­tion un­der Art­icle 30 para­graph 2 let­ter f to can­cel, amend or cor­rect any trans­ac­tion in ex­cep­tion­al cases, a DLT trad­ing fa­cil­ity must have a mech­an­ism in place that achieves an eco­nom­ic­ally equi­val­ent ef­fect.

(Art. 73c para. 3 Fin­MIA)

¹ Private par­ti­cipants are ex­empt from the re­cord-keep­ing duty un­der Art­icle 38 of the Fin­MIA and the re­port­ing duty un­der Art­icle 39 of the Fin­MIA.

² Art­icles 36 and 37 of this Or­din­ance ap­ply by ana­logy to the oth­er par­ti­cipants.

(Art. 73c paras. 4 and 5 Fin­MIA)

¹ The DLT trad­ing fa­cil­ity shall reg­u­late in the reg­u­la­tions in ac­cord­ance with Art­icle 73c para­graph 5 of the Fin­MIA wheth­er and which private par­ti­cipants will be ad­mit­ted.

² The grant­ing of non-dis­crim­in­at­ory ac­cess in ac­cord­ance with Art­icle 18 of the Fin­MIA is not bind­ing for private par­ti­cipants.

(Art. 73d Fin­MIA)

¹ The DLT trad­ing fa­cil­ity shall reg­u­late in the reg­u­la­tions in ac­cord­ance with Art­icle 73d of the Fin­MIA which DLT se­cur­it­ies and oth­er as­sets will be ad­mit­ted to its ser­vices. It may spe­cify the ad­mit­ted DLT se­cur­it­ies and as­sets in­di­vidu­ally in the reg­u­la­tions or define them ac­cord­ing to their type and func­tion.

² If the DLT trad­ing fa­cil­ity ad­mits de­riv­at­ives de­signed as DLT se­cur­it­ies, only products without fair value or lever­age com­pon­ents may be ad­mit­ted to trad­ing.

³ DLT se­cur­it­ies and oth­er as­sets which sig­ni­fic­antly hinder the im­ple­ment­a­tion of the pro­vi­sions of the Anti-Money Laun­der­ing Act of 10 Oc­to­ber 1997²⁴, or which could ad­versely af­fect the sta­bil­ity and in­teg­rity of the fin­an­cial sys­tem may not be ad­mit­ted. FINMA can define these DLT se­cur­it­ies and as­sets in more de­tail.

⁴ The DLT trad­ing fa­cil­ity shall make pro­vi­sion in the reg­u­la­tions for re­vok­ing the ad­mis­sion of DLT se­cur­it­ies and oth­er as­sets.

⁵ The re­quire­ments un­der Art­icle 34 ap­ply by ana­logy.

(Art. 73d para. 3 Fin­MIA)

¹ DLT se­cur­it­ies may be ad­mit­ted by the DLT trad­ing fa­cil­ity if the dis­trib­uted ledger meets at least the re­quire­ments un­der Art­icle 973d para­graph 2 of the CO²⁵.

² If the dis­trib­uted ledger is not op­er­ated by the rel­ev­ant DLT trad­ing fa­cil­ity it­self, the fa­cil­ity shall audit the ledger be­fore ad­mit­ting the rel­ev­ant DLT se­cur­it­ies and reg­u­larly there­after, but at least once a year, for com­pli­ance with the re­quire­ments un­der para­graph 1.

³ It shall in­form its par­ti­cipants of the audits per­formed and of the find­ings.

(Art. 73d Fin­MIA)

¹ The DLT trad­ing fa­cil­ity shall mon­it­or all trans­ac­tions con­duc­ted on its sys­tems with ad­mit­ted DLT se­cur­it­ies. It shall dis­close this data free of charge to all ap­proved DLT trad­ing fa­cil­it­ies.

²If the DLT se­cur­it­ies ad­mit­ted for trad­ing on the DLT trad­ing fa­cil­ity are based on se­cur­it­ies which are also ad­mit­ted for trad­ing on a Swiss trad­ing ven­ue, the DLT trad­ing fa­cil­ity shall dis­close to that trad­ing ven­ue, free of charge, all trans­ac­tions with these DLT se­cur­it­ies.

³ The trad­ing ven­ues and DLT trad­ing fa­cil­it­ies shall use this data ex­clus­ively to ful­fil their tasks in the area of trade mon­it­or­ing.

⁴ FINMA may reg­u­late the de­tails of these dis­clos­ures.

(Art. 73e para. 1 Fin­MIA)

¹ DLT trad­ing fa­cil­it­ies with private par­ti­cipants shall provide them with the as­so­ci­ated pro­spect­us or key in­form­a­tion doc­u­ment for each DLT se­cur­ity ad­mit­ted to the DLT trad­ing fa­cil­ity.

² They shall in­form these par­ti­cipants of the fol­low­ing as­pects of the dis­trib­uted ledger for the rel­ev­ant DLT se­cur­it­ies:

a.

its gov­ernance; and

b.

its tech­nic­al risks, spe­cific­ally the risk of loss.

³ Moreover, they shall im­me­di­ately pub­lish in­form­a­tion on the trans­ac­tions in oth­er as­sets car­ried out on the DLT trad­ing fa­cil­ity, in par­tic­u­lar the price, the volume and the time of the trans­ac­tions.

(Art. 73e para. 2 Fin­MIA)

¹ Un­less oth­er­wise spe­cified in this Sec­tion, the re­quire­ments for cent­ral se­cur­it­ies de­pos­it­or­ies un­der Art­icles 62 to 73 of the Fin­MIA and 52 to 58 of this Or­din­ance ap­ply by ana­logy for DLT trad­ing fa­cil­it­ies that provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c of the Fin­MIA.

² The se­greg­a­tion in ac­cord­ance with Art­icle 69 of the Fin­MIA may take place in the dis­trib­uted ledger un­der­ly­ing the DLT se­cur­it­ies or in the sys­tems of the DLT trad­ing fa­cil­ity.

³ A DLT trad­ing fa­cil­ity may also en­able the set­tle­ment of pay­ments in an­oth­er man­ner than that provided for in Art­icle 65 para­graph 1 of the Fin­MIA if it in­volves a FINMA-su­per­vised in­sti­tu­tion for the pur­pose.

⁴ For a DLT trad­ing fa­cil­ity, li­quid­ity in a cur­rency in ac­cord­ance with Art­icle 67 para­graph 1 of the Fin­MIA also in­cludes crypto­based as­sets, in­so­far as the pay­ment ob­lig­a­tion is to be ful­filled in the same vir­tu­al cur­rency.

⁵ In derog­a­tion from Art­icle 52, the DLT trad­ing fa­cil­ity does not have to set up a user com­mit­tee.

(Art. 73f Fin­MIA)

¹ A DLT trad­ing fa­cil­ity is deemed to be small if the fol­low­ing thresholds are un­der­cut in re­la­tion to DLT se­cur­it­ies:

a.

An­nu­al trad­ing volume: CHF 250 mil­lion;

b.

Cus­tody volume: CHF 100 mil­lion; and

c.

An­nu­al set­tle­ment volume: CHF 250 mil­lion.

² If a threshold is reached or ex­ceeded, the DLT trad­ing fa­cil­ity must re­port this to FINMA with­in 10 days. It must sub­mit a mod­i­fied ap­plic­a­tion for au­thor­isa­tion as provided for in the Fin­MIA to FINMA with­in 90 days.

³ The trad­ing fa­cil­ity shall no longer be deemed to be small after 90 days from the time at which a threshold is reached or ex­ceeded. The DLT trad­ing fa­cil­ity may, however, con­tin­ue to ap­ply the eased re­quire­ments for small DLT trad­ing fa­cil­it­ies un­til FINMA makes its de­cision on the au­thor­isa­tion ap­plic­a­tion.

⁴ Where this serves the pro­tect­ive pur­pose of the Fin­MIA, FINMA may pro­hib­it the DLT trad­ing fa­cil­ity from ad­mit­ting fur­ther par­ti­cipants un­til the de­cision is made on the ap­plic­a­tion for au­thor­isa­tion.

(Art. 73f Fin­MIA)

¹ In derog­a­tion from the Fin­MIA and from this Or­din­ance, the fol­low­ing eased re­quire­ments ap­ply for small DLT trad­ing fa­cil­it­ies:

a.

In derog­a­tion from Art­icle 8 para­graph 2 second sen­tence of the Fin­MIA and Art­icle 8 para­graph 2 second sen­tence of this Or­din­ance, it is suf­fi­cient if the ma­jor­ity of the mem­bers of the bod­ies re­spons­ible for over­all man­age­ment, su­per­vi­sion and con­trol are not mem­bers of the body re­spons­ible for busi­ness man­age­ment.

b.

If the pro­vi­sion of an­cil­lary ser­vices not sub­ject to au­thor­isa­tion or ap­prov­al by vir­tue of fin­an­cial mar­ket le­gis­la­tion in­creases the risks of a DLT trad­ing fa­cil­ity, FINMA may re­quire ex­clus­ively or­gan­isa­tion­al meas­ures (Art. 10 para. 3 of the Fin­MIA). If the DLT trad­ing fa­cil­ity also op­er­ates an or­gan­ised trad­ing fa­cil­ity (Art. 43 of the Fin­MIA), FINMA may re­quire ad­di­tion­al cap­it­al and suf­fi­cient li­quid­ity.

c.

The busi­ness con­tinu­ity re­quire­ments may also be met by hav­ing an­oth­er au­thor­isa­tion hold­er take over the op­er­a­tion of the DLT trad­ing fa­cil­ity in the event of dis­rup­tions (Art. 13 para. 1 of the Fin­MIA). The strategy and busi­ness im­pact ana­lys­is in ac­cord­ance with Art­icle 14 of this Or­din­ance may make pro­vi­sion for the op­er­a­tion of the DLT trad­ing fa­cil­ity to be trans­ferred to a third party.

d.

The reg­u­lat­ory tasks del­eg­ated to the DLT trad­ing fa­cil­ity may also be car­ried out by a non-in­de­pend­ent body (Art. 27 para. 2 of the Fin­MIA).

e.

An in­de­pend­ent ap­peal body is not ne­ces­sary (Art. 37 of the Fin­MIA).

f.

An in­tern­al audit is not ne­ces­sary (Art. 8 para. 1 lit. c of this Or­din­ance).

² For small DLT trad­ing fa­cil­it­ies that provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c of the Fin­MIA, the fol­low­ing eased re­quire­ments ap­ply in ad­di­tion, in derog­a­tion from the Fin­MIA:

a.

The cap­it­al re­quire­ments do not ap­ply (Art. 66 of the Fin­MIA).

b.

The li­quid­ity re­quire­ments do not ap­ply (Art. 67 of the Fin­MIA).

(Art. 73f Fin­MIA)

Be­fore es­tab­lish­ing a busi­ness re­la­tion­ship, small DLT trad­ing fa­cil­it­ies shall in­form their cli­ents, in writ­ing or in an­oth­er form demon­strable by text, of the spe­cif­ic eased re­quire­ments which the small DLT trad­ing fa­cil­ity is ap­ply­ing.

(Art. 73f Fin­MIA)

For small DLT trad­ing fa­cil­it­ies, the min­im­um cap­it­al re­quire­ment is:

a.

CHF 500,000 if they do not provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c;

b.

5% of the DLT se­cur­it­ies in cus­tody, but at least CHF 500,000 if they provide ser­vices in ac­cord­ance with Art­icle 73a para­graph 1 let­ter b or c.

(Art. 73f Fin­MIA)

Small DLT trad­ing fa­cil­it­ies may not grant loans.

(Art. 10 Fin­MIA)

If the trade re­pos­it­ory of­fers an­cil­lary ser­vices, it must provide these in a way that is op­er­a­tion­ally se­greg­ated from its es­sen­tial ser­vices.

(Art. 75 Fin­MIA)

¹ The trade re­pos­it­ory must do the fol­low­ing with re­spect to the re­por­ted data:

a.

re­cord it im­me­di­ately and com­pletely;

b.

save it both on­line and off­line;

c.

copy it to an ap­pro­pri­ate ex­tent.

² It shall re­cord all changes to the re­por­ted data, provid­ing in­form­a­tion on:

a.

at whose re­quest the change was made;

b.

the reas­ons for the change;

c.

the time the change was made;

d.

and provid­ing a clear de­scrip­tion of the change.

(Art. 76 Fin­MIA)

¹ The trade re­pos­it­ory shall pub­lish at least weekly the open po­s­i­tions, trans­ac­tion volumes and val­ues for the fol­low­ing de­riv­at­ive cat­egor­ies:

a.

com­mod­ity de­riv­at­ives;

b.

cred­it de­riv­at­ives;

c.

cur­rency de­riv­at­ives;

d.

equity de­riv­at­ives;

e.

in­terest rate de­riv­at­ives;

f.

oth­er de­riv­at­ives.

² The data must be eas­ily ac­cess­ible for the pub­lic.

³ It should not be pos­sible to draw con­clu­sions with re­spect to a con­tract­ing party on the basis of the data pub­lished.

(Art. 77 Fin­MIA)

¹ The trade re­pos­it­ory shall grant the fol­low­ing au­thor­it­ies ac­cess to the data, whereby para­graph 2 re­mains re­served:

a.

FINMA: all trans­ac­tion data;

b.

the SNB: all trans­ac­tion data;

c.

the Swiss Takeover Board: de­riv­at­ive trans­ac­tion data with a con­nec­tion to takeover pro­ceed­ings;

d.

the Fed­er­al Audit Over­sight Au­thor­ity: de­riv­at­ive trans­ac­tion data that it re­quires in spe­cif­ic su­per­vis­ory pro­ceed­ings in­volving audit firms;

e.

the Com­pet­i­tion Com­mis­sion: de­riv­at­ive trans­ac­tion data with a con­nec­tion to pro­ceed­ings in the field of com­pet­i­tion;

f.

the Elec­tri­city Com­mis­sion: trans­ac­tion data on de­riv­at­ives whose un­der­ly­ing in­stru­ment relates to elec­tri­city.

² The trade re­pos­it­ory shall re­ject en­quir­ies con­cern­ing trans­ac­tions and po­s­i­tions of cent­ral banks.

(Art. 78 Fin­MIA)

¹ The trade re­pos­it­ory shall grant for­eign fin­an­cial mar­ket su­per­vis­ory au­thor­it­ies ac­cess to trans­ac­tion data solely for the pur­poses of en­for­cing fin­an­cial mar­ket law un­der their re­spons­ib­il­ity.

² The trade re­pos­it­ory shall re­ject en­quir­ies con­cern­ing trans­ac­tions and po­s­i­tions of cent­ral banks.

(Art. 77 and 78 Fin­MIA)

¹ The ac­cess of au­thor­it­ies shall be struc­tured in line with the com­mu­nic­a­tion pro­to­cols, data ex­change stand­ards and ref­er­ence data that are com­mon­place at the in­ter­na­tion­al level.

² The au­thor­it­ies must take suit­able meas­ures to en­sure that only the em­ploy­ees who dir­ectly re­quire the data for ex­er­cising their activ­it­ies gain ac­cess to the data.

³ The trade re­pos­it­ory shall provide the au­thor­it­ies with a form for their en­quir­ies in which the fol­low­ing in­form­a­tion is re­quired:

a.

de­tails of the au­thor­ity;

b.

reas­on for the data en­quiry and rel­ev­ance to its man­date;

c.

leg­al basis for the data en­quiry;

d.

a de­scrip­tion of the data it is re­quest­ing;

e.

an il­lus­tra­tion of the meas­ures it has taken to en­sure the con­fid­en­ti­al­ity of data re­ceived.

⁴ From for­eign au­thor­it­ies, it shall ad­di­tion­ally re­quest con­firm­a­tion that an agree­ment is in place between the for­eign and Swiss au­thor­it­ies in ac­cord­ance with Art­icle 78 para­graph 1 Fin­MIA.

⁵ The trade re­pos­it­ory shall keep a re­cord of in­form­a­tion on data ac­cess.

(Art. 79 Fin­MIA)

¹ The trade re­pos­it­ory shall provide private in­di­vidu­als with a form for their en­quir­ies in which the fol­low­ing in­form­a­tion is re­quired:

a.

per­son­al de­tails;

b.

reas­on for the data en­quiry;

c.

a de­scrip­tion of the data be­ing re­ques­ted.

² It should not be pos­sible to draw con­clu­sions with re­spect to an­oth­er con­tract­ing party on the basis of the data trans­ferred.

(Art. 82 Fin­MIA)

¹ The pay­ment sys­tem shall en­sure the prop­er and law­ful clear­ing and set­tle­ment of pay­ment ob­lig­a­tions.

² It shall spe­cify the time:

a.

after which a pay­ment or­der is ir­re­voc­able and may no longer be changed;

b.

when a pay­ment is settled.

³ Pay­ment sys­tems that use a com­mon set­tle­ment in­fra­struc­ture shall es­tab­lish identic­al times for:

a.

the entry of pay­ment or­ders in­to the sys­tem of the com­mon set­tle­ment in­fra­struc­ture;

b.

the ir­re­voc­ab­il­ity of pay­ment or­ders.

⁴ The pay­ment sys­tem shall settle pay­ments in real time if pos­sible, but at the latest at the end of the value day.

(Art. 82 Fin­MIA)

¹ The pay­ment sys­tem shall use ap­pro­pri­ate meas­ures to cov­er risks arising from the grant­ing of cred­it.

² It shall ac­cept only li­quid col­lat­er­al with low cred­it and mar­ket risks. It shall value the col­lat­er­al prudently.

³ It shall avoid con­cen­tra­tion risks in the col­lat­er­al and shall en­sure that it can have prompt ac­cess to the col­lat­er­al.

⁴ It shall make pro­vi­sion for pro­ced­ures by means of which it can re­view the mod­els and para­met­ers on which its risk man­age­ment is based, and shall con­duct these re­views on a reg­u­lar basis.

⁵ If it holds its own as­sets or the col­lat­er­al and as­sets of par­ti­cipants with third parties, it shall min­im­ise the as­so­ci­ated risks. In par­tic­u­lar, it shall hold the col­lat­er­al and as­sets with cred­it­worthy fin­an­cial in­ter­me­di­ar­ies which, in­so­far as pos­sible, are sub­ject to su­per­vi­sion.

(Art. 82 Fin­MIA)

¹ The pay­ment sys­tem shall en­able the set­tle­ment of pay­ments by trans­fer­ring sight de­pos­its held with a cent­ral bank.

² If this is im­possible or im­prac­tic­al, it shall use a means of pay­ment which car­ries no or only low cred­it and li­quid­ity risks. It shall min­im­ise these risks and mon­it­or them on an on­go­ing basis.

³ Where ex­change-of-value set­tle­ment is con­cerned, the pay­ment sys­tem shall en­able par­ti­cipants to elim­in­ate their prin­cip­al risk by en­sur­ing that the set­tle­ment of one ob­lig­a­tion oc­curs if and only if the set­tle­ment of the oth­er ob­lig­a­tion is guar­an­teed.

(Art. 82 Fin­MIA)

In the case of sys­tem­ic­ally im­port­ant pay­ment sys­tems, the cap­it­al must suf­fice to im­ple­ment the plan set out in Art­icle 72, but must at least be suf­fi­cient to cov­er on­go­ing op­er­at­ing ex­pendit­ure for six months.

(Art. 82 Fin­MIA)

¹ The pay­ment sys­tem must have suf­fi­cient li­quid­ity in ac­cord­ance with Art­icle 58 para­graph 1:

a.

to ful­fil its pay­ment ob­lig­a­tions in all cur­ren­cies un­der ex­treme but plaus­ible mar­ket con­di­tions, even in the event of the de­fault of the par­ti­cipant to which it has its greatest ex­pos­ure; and

b.

to be able to duly ex­ecute its ser­vices and activ­it­ies.

² It shall in­vest its fin­an­cial re­sources solely in cash or in li­quid fin­an­cial in­stru­ments with a low mar­ket and cred­it risk.

³ It shall reg­u­larly re­view com­pli­ance with the re­quire­ments set out in para­graph 1 un­der vari­ous stress scen­ari­os. In do­ing so, it shall ap­ply col­lat­er­al dis­counts (hair­cuts) to the li­quid­ity that would be ap­pro­pri­ate even un­der ex­treme but plaus­ible mar­ket con­di­tions. It shall di­ver­si­fy its sources of li­quid­ity.

⁴ The in­vest­ment strategy of the pay­ment sys­tem must be in har­mony with its risk man­age­ment strategy. It must avoid con­cen­tra­tion risks.

(Art. 84 para. 1 Fin­MIA)

¹ The audit firm of the fin­an­cial mar­ket in­fra­struc­ture shall re­view wheth­er the lat­ter ful­fils the rel­ev­ant du­ties as set forth in le­gis­la­tion, this Or­din­ance and its own con­trac­tu­al basis.

² The audit firm of the trad­ing ven­ue shall co­ordin­ate its audit with the lat­ter's trad­ing su­per­vis­ory body and shall pass on its audit re­ports to this body.

(Art. 86 Fin­MIA)

¹ Sys­tem­ic­ally im­port­ant fin­an­cial mar­ket in­fra­struc­tures shall draw up a plan as to how their sys­tem­ic­ally im­port­ant busi­ness pro­cesses are to be ter­min­ated in an or­derly way in the event of a vol­un­tary ces­sa­tion of busi­ness. The or­derly wind-down plan shall take in­to ac­count the peri­od of time re­quired for the par­ti­cipants to sign up to an al­tern­at­ive fin­an­cial mar­ket in­fra­struc­ture. It must be ap­proved by the body re­spons­ible for gov­ernance, su­per­vi­sion and con­trol.

² Para­graph 1 also ap­plies if the ces­sa­tion of a sys­tem­ic­ally im­port­ant busi­ness pro­cess does not lead to the re­turn of the au­thor­isa­tion.

(Art. 89 Fin­MIA)

¹ The or­ders of par­ti­cipants in­clude in par­tic­u­lar in­struc­tions that:

a.

dir­ectly af­fect the set­tle­ment of pay­ments or se­cur­it­ies trans­ac­tions; or

b.

serve the pur­pose of provid­ing the fin­an­cing or col­lat­er­al re­quired un­der the sys­tem's rules.

² A pay­ment or trans­fer or­der may not be re­voked either by a par­ti­cipant in the sys­tem or by a third party from the time set out in Art­icle 62 para­graph 4 let­ter a Fin­MIA and Art­icle 66 para­graph 2 let­ter a of this Or­din­ance.

(Art. 90 and 91 Fin­MIA)

¹ The off­set­ting agree­ments shall in­clude in par­tic­u­lar net­ting pro­vi­sions as well as the de­fault agree­ments con­tained in bi­lat­er­al or frame­work agree­ments.

² The trans­fer of re­ceiv­ables and li­ab­il­it­ies is un­der­stood to mean in par­tic­u­lar the as­sign­ment, can­cel­la­tion, re­found­ing via agree­ment and the clos­ure of a po­s­i­tion and sub­sequent re­open­ing of an equi­val­ent po­s­i­tion.

³ In the event of a trans­fer of a po­s­i­tion, any col­lat­er­al in the form of se­cur­it­ies or oth­er as­sets whose value can be de­term­ined ob­ject­ively are auto­mat­ic­ally trans­ferred, in­so­far as they were passed on with­in the trans­ac­tion chain, to the tak­ing-over par­ti­cipant.

(Art. 92 Fin­MIA)

¹ The fol­low­ing con­tracts in par­tic­u­lar may be post­poned:

a.

con­tracts on the pur­chase, sale, re­pur­chase and lend­ing of se­cur­it­ies and book-entry se­cur­it­ies and on trad­ing in op­tions on se­cur­it­ies and book-entry se­cur­it­ies;

b.

con­tracts on the pur­chase and sale with fu­ture de­liv­ery of com­mod­it­ies and on trad­ing in op­tions on com­mod­it­ies or on com­mod­ity de­liv­er­ies;

c.

con­tracts on the pur­chase, sale or trans­fer of goods, ser­vices, rights or in­terest at a price and fu­ture date de­term­ined in ad­vance (fu­tures trades/for­ward trad­ing);

d.

con­tracts on swap trans­ac­tions re­lat­ing to cur­ren­cies, pre­cious metals, loans and se­cur­it­ies, book-entry se­cur­it­ies, com­mod­it­ies and their in­dices.

² The fin­an­cial mar­ket in­fra­struc­ture shall en­sure that new agree­ments or amend­ments to ex­ist­ing agree­ments which are sub­ject to for­eign law or en­vis­age a for­eign jur­is­dic­tion are agreed only if the coun­ter­party re­cog­nises a post­pone­ment of the ter­min­a­tion of agree­ments in ac­cord­ance with Art­icle 30a BankA.

(Art. 93 para. 2 lit. e and f Fin­MIA)

Wheth­er a col­lect­ive in­vest­ment scheme counts as a fin­an­cial coun­ter­party or as a small fin­an­cial coun­ter­party is de­term­ined on the basis of the OTC de­riv­at­ives trans­ac­tions car­ried out for its own ac­count in ac­cord­ance with Art­icle 99 Fin­MIA, re­gard­less of wheth­er it can be ascribed leg­al per­son­al­ity or not.

(Art. 93 para. 3 Fin­MIA)

¹ Un­der the Fin­MIA, a com­pany is deemed to be any leg­al en­tity entered in the com­mer­cial re­gister.

² Also clas­si­fied as com­pan­ies are for­eign com­pan­ies en­gaged in eco­nom­ic activ­it­ies that are leg­al en­tit­ies ac­cord­ing to the law ap­plic­able to them, as well as trusts and sim­il­ar con­structs.

(Art. 93 para. 5 Fin­MIA)

If FINMA de­term­ines that a Swiss branch of a for­eign coun­ter­party is sub­ject to reg­u­la­tion that does not cor­res­pond to the stat­utory re­quire­ments to a sig­ni­fic­ant ex­tent, it can sub­ject the de­riv­at­ives trans­ac­tions car­ried out by the branch in ques­tion to Art­icles 93 to 117 Fin­MIA on de­riv­at­ives trad­ing.

(Art. 94 para. 2 Fin­MIA)

¹ De­riv­at­ives with the fol­low­ing coun­ter­parties are sub­ject to the re­port­ing duty set out in Art­icle 104 Fin­MIA, but not to the oth­er de­riv­at­ives trad­ing du­ties:

a.

for­eign cent­ral banks;

b.

the ECB;

c.

the EF­SF;

d.

the ESM;

e.

of­fi­cial bod­ies or state de­part­ments that are re­spons­ible for or in­volved in ad­min­is­ter­ing the na­tion­al debt;

f.

fin­an­cial in­sti­tu­tions set up by a cent­ral gov­ern­ment or by the gov­ern­ment of a sub­or­din­ate re­gion­al body in or­der to grant pro­mo­tion­al loans on the state's be­half on a non-com­pet­it­ive, non-profit-ori­ented basis.

² De­riv­at­ives trans­ac­tions with for­eign cent­ral banks and with the bod­ies lis­ted un­der para­graph 1 let­ter e may be ex­emp­ted from the re­port­ing duty provided re­cipro­city is gran­ted.

³ The FDF shall pub­lish a list of the for­eign bod­ies covered by para­graph 2.

(Art. 94 para. 4 Fin­MIA)

In ad­di­tion to the de­riv­at­ives lis­ted un­der Art­icle 94 para­graph 3 Fin­MIA, the fol­low­ing de­riv­at­ives are ex­cluded from Art­icles 93 to 117 Fin­MIA con­cern­ing de­riv­at­ives trad­ing:

a.

de­riv­at­ives is­sued in the form of a se­cur­ity or un­cer­ti­fic­ated se­cur­ity;

b.

de­riv­at­ives ac­cep­ted in the form of a de­pos­it.

(Art. 95 Fin­MIA)

¹ FINMA shall re­cog­nise for­eign law as equi­val­ent if the du­ties that ap­ply for de­riv­at­ives trad­ing and the pro­vi­sions on su­per­vi­sion are com­par­able with the Swiss equi­val­ent in their ma­ter­i­al im­pact.

² This con­di­tion is met with re­spect to the:

a.

clear­ing duty un­der Art­icle 97 Fin­MIA, if the clear­ing in ques­tion largely re­duces the sys­tem­ic and coun­ter­party risks of stand­ard­ised OTC de­riv­at­ives;

b.

re­port­ing duty un­der Art­icle 104 Fin­MIA, if the re­port con­tains at least the in­form­a­tion set out in the Art­icle 105 para­graph 2 Fin­MIA;

c.

the risk mit­ig­a­tion duty un­der Art­icles 107 to 110 Fin­MIA, if the cor­res­pond­ing meas­ures largely re­duce the sys­tem­ic and coun­ter­party risks of non-stand­ard­ised OTC de­riv­at­ives;

d.

the plat­form trad­ing duty un­der Art­icle 112 Fin­MIA, if pre-trade and post-trade trans­par­ency in the de­riv­at­ives mar­ket is ap­pro­pri­ately im­proved through the trad­ing of stand­ard­ised de­riv­at­ives via trad­ing ven­ues or or­gan­ised trad­ing fa­cil­it­ies.

³ A Swiss coun­ter­party can ful­fil its de­riv­at­ives trad­ing du­ties with an­oth­er Swiss coun­ter­party un­der for­eign su­per­vis­ory le­gis­la­tion re­cog­nised by FINMA if the de­riv­at­ives trans­ac­tion in ques­tion or a coun­ter­party to this trans­ac­tion has an ob­ject­ive con­nec­tion with this le­gis­la­tion. The simply choice of law does not cre­ate an ob­ject­ive con­nec­tion.

(Art. 96 Fin­MIA)

If the coun­ter­party com­mis­sions group com­pan­ies and branches in Switzer­land and abroad with the ful­fil­ment of its du­ties un­der Art­icles 93 to 117 Fin­MIA, it may ex­change all ne­ces­sary in­form­a­tion in this re­spect with these group com­pan­ies and branches, in­clud­ing cli­ent data, without this re­quir­ing the ap­prov­al of the cli­ent in ques­tion.

(Art. 97 para. 3 Fin­MIA)

¹ The de­clar­a­tion of a coun­ter­party with re­spect to its char­ac­ter­ist­ics ap­plies with re­spect to all the du­ties set out in this chapter.

² Coun­ter­parties must in­form the coun­ter­parties with which it reg­u­larly enters in­to de­riv­at­ives trans­ac­tions about any change in its status in a timely man­ner.

(Art. 101 para. 3, 107 para. 2, 113 para. 3 Fin­MIA)

The cur­rency swaps and cur­rency for­ward trans­ac­tions that are ex­empt from the clear­ing duty (Art. 97 Fin­MIA), the risk mit­ig­a­tion du­ties (Art. 107 to 111 Fin­MIA) and the plat­form trad­ing duty (Art. 112 Fin­MIA) com­prise all trans­ac­tions for the ex­change of cur­ren­cies in which real ex­e­cu­tion is guar­an­teed, ir­re­spect­ive of the clear­ing meth­od.

(Art. 97 and 101 para. 2 Fin­MIA)

The duty to clear de­riv­at­ives trans­ac­tions via au­thor­ised or re­cog­nised cent­ral coun­ter­parties ap­plies from the point at which FINMA pub­lishes the clear­ing duty for the de­riv­at­ive cat­egory in ques­tion:

a.

after the ex­piry of six months: for de­riv­at­ives trans­ac­tions which par­ti­cipants in an au­thor­ised or re­cog­nised cent­ral coun­ter­party con­clude anew with one an­oth­er;

b.

after the ex­piry of 12 months: for de­riv­at­ives trans­ac­tions which:

1.

par­ti­cipants in an au­thor­ised or re­cog­nised cent­ral coun­ter­party con­clude anew with oth­er fin­an­cial coun­ter­parties that are not small, or

2.

oth­er fin­an­cial coun­ter­parties that are not small con­clude anew with one an­oth­er;

c.

after the ex­piry of 18 months: for all oth­er de­riv­at­ives trans­ac­tions con­cluded anew.

(Art. 94 para. 4 and 97 para. 2 Fin­MIA)²⁶

¹ Trans­ac­tions with coun­ter­parties that are sub­ject to the clear­ing duty for the first time in ac­cord­ance with Art­icle 98 para­graph 2 or Art­icle 99 para­graph 2 Fin­MIA do not need to be cleared through a cent­ral coun­ter­party if they were con­cluded pri­or to sub­jec­tion to the clear­ing duty.

² De­riv­at­ives trans­ac­tions with coun­ter­parties which have their re­gistered of­fice or dom­i­cile in Switzer­land to which the de­riv­at­ives trad­ing pro­vi­sions do not ap­ply do not have to be cleared through a cent­ral coun­ter­party.

³ De­riv­at­ives trans­ac­tions in which a covered bond is­suer or a leg­al en­tity of a cov­er pool for covered bonds is in­volved do not have to be cleared via a cent­ral coun­ter­party if the fol­low­ing pre­requis­ites are met:

a.

The de­riv­at­ives trans­ac­tion serves the sole pur­pose of hedging in­terest rate or cur­rency risks arising from the covered bond for the cov­er pool.

b.

The de­riv­at­ives trans­ac­tion is not ter­min­ated in the event of re­struc­tur­ing or bank­ruptcy pro­ceed­ings brought against the covered bond is­suer or the leg­al en­tity of the cov­er pool.

c.

The coun­ter­party of the covered bond is­suer or of the leg­al en­tity of the cov­er pool is at least pari passu with the covered bond cred­it­ors, ex­cept in cases where:

1.

the coun­ter­party is the de­fault­ing or af­fected party; or

2.

the coun­ter­party re­nounces pari passu status.

d.

The oth­er de­riv­at­ives trans­ac­tions entered in­to as part of the net­ting set are linked to the cov­er pool.

e.

The cov­er pool's col­lat­er­al ra­tio is at least 102%.²⁷

(Art. 98 para. 3 Fin­MIA)

De­riv­at­ives trans­ac­tions in­ten­ded to re­duce risks are dir­ectly as­so­ci­ated with the busi­ness activ­ity, li­quid­ity man­age­ment or as­set man­age­ment of the non-fin­an­cial coun­ter­party if they:

a.

serve to hedge the risks of a change in value of as­sets or li­ab­il­it­ies which the non-fin­an­cial coun­ter­party or its group can reas­on­ably be con­sidered to hold, in keep­ing with its busi­ness activ­ity;

b.

serve to hedge the risks to the value of as­sets and li­ab­il­it­ies that res­ult from in­dir­ect re­per­cus­sions of fluc­tu­ations in in­terest rates, in­fla­tion rates, cur­rency move­ments or cred­it risks;

c.

are re­cog­nised as hedging trans­ac­tions ac­cord­ing to an ac­count­ing stand­ard that is re­cog­nised un­der Art­icle 1 of the Or­din­ance of 21 Novem­ber 2012²⁸ on Re­cog­nised Ac­count­ing Stand­ards; or

d.

are con­cluded as fixed hedging trans­ac­tions in the con­text of the man­age­ment of busi­ness risks (port­fo­lio hedging or macro hedging) or are con­cluded ac­cord­ing to the ap­prox­im­a­tion meth­od (proxy hedging) in keep­ing with re­cog­nised in­ter­na­tion­al stand­ards.

(Art. 100 Fin­MIA)

¹ The fol­low­ing thresholds ap­ply to the av­er­age gross po­s­i­tions in out­stand­ing OTC de­riv­at­ives trans­ac­tions of non-fin­an­cial coun­ter­parties:

a.

cred­it de­riv­at­ives: CHF 1.1 bil­lion;

b.

equity de­riv­at­ives: CHF 1.1 bil­lion;

c.

in­terest rate de­riv­at­ives: CHF 3.3 bil­lion;

d.

cur­rency de­riv­at­ives: CHF 3.3 bil­lion;

e.

com­mod­ity de­riv­at­ives and oth­er de­riv­at­ives: CHF 3.3 bil­lion.

² Where the av­er­age gross po­s­i­tion of all out­stand­ing OTC de­riv­at­ives trans­ac­tions of fin­an­cial coun­ter­parties are con­cerned, a threshold of CHF 8 bil­lion ap­plies at fin­an­cial or in­sur­ance group level.

(Art. 100 Fin­MIA)

The fol­low­ing rules ap­ply to the cal­cu­la­tion of the av­er­age gross po­s­i­tion of out­stand­ing OTC de­riv­at­ives trans­ac­tions:

a.

The latest ex­change rates shall be used in the cal­cu­la­tion.

b.

Po­s­i­tions from OTC de­riv­at­ives trans­ac­tions are factored in­to the cal­cu­la­tion even if they are vol­un­tar­ily cleared cent­rally.

c.

Po­s­i­tions of fully-con­sol­id­ated group com­pan­ies, in­clud­ing those with their re­gistered of­fice out­side Switzer­land, shall be factored in ir­re­spect­ive of the re­gistered of­fice of the par­ent com­pany if these group com­pan­ies would count as fin­an­cial or non-fin­an­cial coun­ter­parties in Switzer­land.

d.

Ad­just­ments to the nom­in­al amount dur­ing the term shall be factored in if these were con­trac­tu­ally en­vis­aged at the start of the trans­ac­tion.

e.

Trans­ac­tions in the sub­sequent trans­ac­tion chain of hedging trans­ac­tions of a non-fin­an­cial coun­ter­party like­wise count as hedging trans­ac­tions.

f.

The net­ting of op­pos­ing po­s­i­tions in de­riv­at­ives is per­mit­ted in­so­far as these po­s­i­tions re­late to the same un­der­ly­ing in­stru­ment, are de­nom­in­ated in the same cur­rency and have the same ma­tur­ity date. In such case, the ref­er­ence in­terest rates for vari­able-in­terest po­s­i­tions, the fixed in­terest rates and the in­terest-set­ting ref­er­ence dates must be identic­al.

g.

De­riv­at­ives not covered by the clear­ing duty un­der Art­icle 101 para­graph 3 let­ter b Fin­MIA shall not be factored in.

(Art. 94 para. 2 and 102 Fin­MIA)

Cross-bor­der trans­ac­tions do not have to be cleared through a cent­ral coun­ter­party if the for­eign coun­ter­party:

a.

has its re­gistered of­fice in a coun­try whose le­gis­la­tion is re­cog­nised by FINMA as be­ing equi­val­ent; and

b.

the trans­ac­tions in ques­tion are not sub­ject to the clear­ing duty un­der the le­gis­la­tion of that coun­try.

(Art. 103 lit. b Fin­MIA)

Non-fin­an­cial coun­ter­parties are sub­ject to ap­pro­pri­ate cent­ral­ised risk eval­u­ation, meas­ure­ment and con­trol pro­ced­ures if they main­tain pro­fes­sion­al cent­ral treas­ury op­er­a­tions.

(Art. 104 Fin­MIA)

¹ De­riv­at­ives trans­ac­tions with parties that are ex­emp­ted from the pro­vi­sions on de­riv­at­ives trad­ing are to be re­por­ted by the coun­ter­party sub­ject to the le­gis­la­tion.

² Sub­ject to Art­icle 104 para­graph 4 Fin­MIA, cent­rally cleared trans­ac­tions that are traded via a trad­ing ven­ue or an or­gan­ised trad­ing fa­cil­ity are to be re­por­ted by the coun­ter­party closest to the cent­ral coun­ter­party in the trans­ac­tion chain.

³ The defin­i­tion of selling coun­ter­party shall be based on con­ven­tion­al in­dustry and re­cog­nised in­ter­na­tion­al stand­ards, whereby agree­ment on an­oth­er in­ter­pret­a­tion re­mains re­served.

⁴ A coun­ter­party may sub­mit data to a trade re­pos­it­ory in Switzer­land or abroad without the ap­prov­al of, or without in­form­ing, its coun­ter­party or an end cli­ent, as long as this is done in ful­fil­ment of the du­ties set out in Title 3 Fin­MIA, whereby Art­icle 105 para­graph 4 Fin­MIA re­mains re­served.

(Art. 105 para. 2 Fin­MIA)

Re­ports are to con­tain the in­form­a­tion set out in An­nex 2.

(Art. 107 to 111 Fin­MIA)

¹ The risk mit­ig­a­tion du­ties ap­ply only to de­riv­at­ives trans­ac­tions between com­pan­ies.

² If FINMA de­term­ines that a de­riv­at­ives trans­ac­tion should no longer be sub­ject to the clear­ing duty, it shall in­form the coun­ter­parties promptly in this re­spect, grant­ing them an ap­pro­pri­ate peri­od in which to make the ne­ces­sary ad­just­ments.

(Art. 108 lit. a Fin­MIA)

¹ The con­trac­tu­al terms must be re­cip­roc­ally con­firmed at the latest with­in two busi­ness days of the con­clu­sion of the OTC de­riv­at­ives trans­ac­tion in ques­tion.

² OTC de­riv­at­ives trans­ac­tions con­cluded after 4 p.m. must be con­firmed at the latest with­in three busi­ness days of the trans­ac­tion be­ing con­cluded.

³ The dead­lines that ap­ply for com­plex trans­ac­tions and small coun­ter­parties shall be ex­ten­ded by one busi­ness day.

⁴ The coun­ter­parties may agree that an OTC de­riv­at­ives trans­ac­tion should also be con­sidered con­firmed if one of the coun­ter­parties does not raise any ob­jec­tion to a uni­lat­er­al con­firm­a­tion.

(Art. 108 lit. b Fin­MIA)

¹ The de­tails for re­con­cil­ing the port­fo­li­os must be agreed pri­or to com­plet­ing an OTC de­riv­at­ives trans­ac­tion.

² The port­fo­lio re­con­cili­ation shall en­com­pass the key terms of the con­cluded OTC de­riv­at­ives trans­ac­tions and their valu­ation.

³ It may also be car­ried out by a third party ap­poin­ted by one of the coun­ter­parties.

⁴ It must be car­ried out:

a.

every busi­ness day if there are 500 or more OTC de­riv­at­ives trans­ac­tions out­stand­ing between the coun­ter­parties;

b.

once a week if there are between 51 and 499 OTC de­riv­at­ives trans­ac­tions out­stand­ing between the coun­ter­parties at any point dur­ing the week;

c.

once a quarter if there are 50 or less OTC de­riv­at­ives trans­ac­tions out­stand­ing between the coun­ter­parties at any point dur­ing the quarter.

⁵ De­riv­at­ives not covered by the clear­ing duty un­der Art­icle 101 para­graph 3 let­ter b Fin­MIA are not factored in for pur­poses of de­term­in­ing out­stand­ing trans­ac­tions in ac­cord­ance with para­graph 4.

(Art. 108 lit. c Fin­MIA)

¹ The place of jur­is­dic­tion and the ap­plic­able law for any dis­putes must be agreed at the latest when an OTC de­riv­at­ives trans­ac­tion is con­cluded.

² Pro­ced­ures are to be set out in the agree­ment:

a.

for the iden­ti­fic­a­tion, re­cord­ing and mon­it­or­ing of dis­putes in con­nec­tion with the re­cog­ni­tion or valu­ation of the trans­ac­tion and the ex­change of col­lat­er­al between the coun­ter­parties; the re­cord of the dis­pute has to en­com­pass at least how long the dis­pute has been go­ing on for up to that point, the coun­ter­party and the dis­puted amount;

b.

for the swift res­ol­u­tion of dis­putes and for a spe­cial pro­cess for dis­putes that can­not be re­solved with­in five busi­ness days.

(Art. 108 lit. d Fin­MIA)

¹ Port­fo­lio com­pres­sion need not be un­der­taken if it would not lead to any mean­ing­ful re­duc­tion in coun­ter­party risk and the coun­ter­party sub­ject to the ob­lig­a­tion doc­u­ments this at least every six months.

² Port­fo­lio com­pres­sion would not lead to any mean­ing­ful re­duc­tion in coun­ter­party risk in par­tic­u­lar if:

a.

the port­fo­lio con­tains no or only a few off­set­table OTC de­riv­at­ives trans­ac­tions;

b.

such activ­ity would jeop­ard­ise the ef­fect­ive­ness of in­tern­al risk pro­cesses and con­trols.

³ Port­fo­lio com­pres­sion also need not be un­der­taken if the cor­res­pond­ing work and ex­pense would be dis­pro­por­tion­ate to the an­ti­cip­ated re­duc­tion in coun­ter­party risk.

(Art. 109 Fin­MIA)

¹ Mar­ket con­di­tions that do not per­mit the valu­ation of OTC de­riv­at­ives trans­ac­tions are deemed to hold sway if:

a.

the mar­ket in ques­tion is in­act­ive; or

b.

the range of plaus­ible fair value es­tim­ates is sig­ni­fic­ant and the prob­ab­il­it­ies of the vari­ous es­tim­ates can­not be reas­on­ably as­sessed.

² A mar­ket for an OTC de­riv­at­ives trans­ac­tion is viewed as in­act­ive if:

a.

the quoted prices are not auto­mat­ic­ally and reg­u­larly avail­able; and

b.

the prices avail­able do not rep­res­ent mar­ket trans­ac­tions that take place reg­u­larly and un­der stand­ard mar­ket con­di­tions.

³ If a valu­ation is per­miss­ible on the basis of mod­el prices, the mod­el must:

a.

take in­to con­sid­er­a­tion all factors that the coun­ter­parties would take in­to ac­count when de­term­in­ing a price, in­clud­ing the greatest pos­sible use of mar­ket valu­ation in­form­a­tion;

b.

be in line with re­cog­nised eco­nom­ic pro­cesses for de­term­in­ing the prices of fin­an­cial in­stru­ments;

c.

be cal­ib­rated us­ing the prices of ob­serv­able latest mar­ket trans­ac­tions with the same fin­an­cial in­stru­ment, be re­viewed with re­spect to its valid­ity or be based on avail­able and ob­serv­able mar­ket data;

d.

be mon­itored and val­id­ated in­de­pend­ently as part of in­tern­al risk man­age­ment pro­cesses;

e.

be prop­erly doc­u­mented and ap­proved by the man­age­ment body, the ex­ec­ut­ive man­age­ment or a risk com­mit­tee del­eg­ated by the lat­ter, and be re­viewed at least once a year.

(Art. 110 Fin­MIA)

¹ If coun­ter­parties have to ex­change col­lat­er­al, this shall take the form of:

a.

an ini­tial mar­gin that is suit­able for pro­tect­ing the trans­ac­tion part­ners from the po­ten­tial risk that there could be mar­ket price changes dur­ing the clos­ing and re­place­ment of the po­s­i­tion in the event of de­fault on the part of a coun­ter­party; and

b.

a vari­ation mar­gin that is suit­able for pro­tect­ing the trans­ac­tion part­ners from the on­go­ing risk of mar­ket price changes fol­low­ing ex­e­cu­tion of the trans­ac­tion.

² The duty to sup­ply an ini­tial mar­gin ap­plies only to coun­ter­parties whose ag­greg­ated month-end av­er­age gross po­s­i­tion of OTC de­riv­at­ives not cleared through a cent­ral coun­ter­party, in­clud­ing de­riv­at­ives in ac­cord­ance with Art­icle 107 para­graph 2 let­ter b of the Fin­MIA, is great­er than CHF 8 bil­lion at group or fin­an­cial or in­sur­ance group level for the months of March, April and May of the year; in this re­gard, in­tra-group trans­ac­tions are not coun­ted sev­er­al times from the view­point of each group com­pany.

³ The duty un­der para­graph 2 al­ways ap­plies for the en­tirety of the sub­sequent cal­en­dar year.

(Art. 110 Fin­MIA)

¹ The ex­change of ini­tial mar­gins and vari­ation mar­gins may be waived if:

a.

the col­lat­er­al to be ex­changed would amount to less than CHF 500,000;

b.

small non-fin­an­cial coun­ter­parties are in­volved in the trans­ac­tion.

² The ex­change of ini­tial mar­gins may be waived if such mar­gins would have to be provided for the cur­rency com­pon­ents of cur­rency de­riv­at­ives where the nom­in­al amount and in­terest in one cur­rency are ex­changed against the nom­in­al amount and in­terest in an­oth­er cur­rency at a pre­defined time and ac­cord­ing to a pre­defined meth­od.

³ If one of the coun­ter­parties to a de­riv­at­ives trans­ac­tion is a covered bond is­suer or a leg­al en­tity of a cov­er pool for covered bonds, that coun­ter­party may, sub­ject to the con­di­tions set out in Art­icle 86 para­graph 3, agree with its coun­ter­party that:

a.

an ex­change of ini­tial mar­gins will be dis­pensed with; or

b.

the covered bond is­suer or the leg­al en­tity of a cov­er pool for covered bonds will pay no vari­ation mar­gins, and the coun­ter­party will pay vari­ation mar­gins in cash.

(Art. 110 Fin­MIA)

¹ The coun­ter­parties may re­duce ini­tial mar­gins by no more than CHF 50 mil­lion.

² The amount of the ini­tial mar­gins of a coun­ter­party that be­longs to a fin­an­cial or in­sur­ance group or a group is de­term­ined tak­ing all of the group com­pan­ies in­to ac­count.

³ In the case of in­tra-group trans­ac­tions, the ini­tial mar­gin may be re­duced by no more than CHF 10 mil­lion.

(Art. 110 Fin­MIA)

¹ The ini­tial mar­gin must be cal­cu­lated for the first time with­in one busi­ness day of the ex­e­cu­tion of the de­riv­at­ives trans­ac­tion. It must be re­cal­cu­lated reg­u­larly, but at least every ten busi­ness days.

² If both of the coun­ter­parties are in the same time zone, the cal­cu­la­tion is to be based on the pre­vi­ous day's net­ting set. If the two coun­ter­parties are not in the same time zone, the cal­cu­la­tion is to be based on the net­ting set trans­ac­tions that were ex­ecuted on the pre­vi­ous day be­fore 4pm in the earli­er of the two time zones.

³ The ini­tial mar­gin is to be paid on the re­spect­ive cal­cu­la­tion day ac­cord­ing to para­graph 1. The cus­tom­ary time­frames ap­ply for set­tle­ment.

(Art. 110 Fin­MIA)

¹ Vari­ation mar­gins are to be re­cal­cu­lated at least every busi­ness day.

² The basis of the cal­cu­la­tion is the valu­ation of the out­stand­ing trans­ac­tion in ac­cord­ance with Art­icle 109 of the Fin­MIA. For all oth­er mat­ters, Art­icle 101 para­graph 2 is ap­plic­able by ana­logy.

³ Vari­ation mar­gins are to be paid on the re­spect­ive cal­cu­la­tion day ac­cord­ing to para­graph 1. The cus­tom­ary time­frames ap­ply for set­tle­ment.

⁴ Not­with­stand­ing para­graph 3, vari­ation mar­gins may be paid up to two busi­ness days after the cal­cu­la­tion day if:

a.

A coun­ter­party not ob­liged to pay an ini­tial mar­gin provided ad­di­tion­al col­lat­er­al be­fore the cal­cu­la­tion day and the fol­low­ing con­di­tions are met:

1.

the ad­di­tion­al col­lat­er­al was cal­cu­lated tak­ing ac­count of a 99% one-tailed con­fid­ence in­ter­val for the valu­ation of the OTC de­riv­at­ives trans­ac­tions to be se­cured for the rel­ev­ant mar­gin peri­od of risk,

2.

the mar­gin peri­od of risk is at least as many days as the num­ber of days between the cal­cu­la­tion day and the vari­ation mar­gin pay­ment day, whereby the cal­cu­la­tion day and pay­ment day also have to be coun­ted; or

b.

the coun­ter­parties paid ini­tial mar­gins tak­ing ac­count of a mar­gin peri­od of risk span­ning at least the fol­low­ing peri­ods:

1.

the peri­od from the last vari­ation mar­gin pay­ment day to the pos­sible coun­ter­party de­fault, plus the days from the cal­cu­la­tion day to the vari­ation mar­gin pay­ment day, and

2.

the peri­od deemed ne­ces­sary to re­place the OTC de­riv­at­ives trans­ac­tion con­cerned or to hedge the res­ult­ing risks.

(Art. 110 Fin­MIA)

¹ No re­cip­roc­al off­set­ting may ap­ply to ini­tial mar­gins.

² Ini­tial mar­gins paid in cash must be held with a cent­ral bank or a Swiss bank in­de­pend­ent of the pay­ing coun­ter­party or an in­de­pend­ent for­eign bank sub­ject to ap­pro­pri­ate reg­u­la­tion and su­per­vi­sion.

³ Ini­tial mar­gins not paid in cash may be held by the re­ceiv­ing coun­ter­party or by a third party man­dated by the coun­ter­party. The third party may be the pay­ing coun­ter­party.

⁴ The use of ini­tial mar­gins for oth­er pur­poses is not per­miss­ible. This does not ap­ply to the re­ut­il­isa­tion of ini­tial mar­gins paid in cash by a cus­todi­al third party, provided it is con­trac­tu­ally en­sured that the re­ut­il­isa­tion does not ad­versely af­fect the se­cur­ity and its us­ab­il­ity.

⁵ The re­ceiv­ing coun­ter­party and the cus­todi­al third party must keep the non-cash ini­tial mar­gins re­ceived sep­ar­ate from their own as­sets and con­clude a se­greg­a­tion agree­ment. This shall pre­scribe in par­tic­u­lar that:

a.

the ini­tial mar­gin pay­ment should be im­me­di­ately avail­able to the re­ceiv­ing coun­ter­party in the event of bank­ruptcy or de­fault on the part of the oth­er coun­ter­party; and

b.

the coun­ter­party mak­ing the ini­tial mar­gin pay­ment should be suf­fi­ciently hedged against the pos­sib­il­ity of bank­ruptcy or de­fault on the part of the re­ceiv­ing party or the cus­todi­al third party.

(Art. 110 Fin­MIA)

¹ The ini­tial mar­gin is cal­cu­lated as a per­cent­age dis­count on the gross po­s­i­tions of the in­di­vidu­al de­riv­at­ives trans­ac­tions. De­riv­at­ives trans­ac­tions that form the ob­ject of a net­ting agree­ment con­cluded between the coun­ter­parties («net­ting set») may be pooled.

² It shall amount to the fol­low­ing for each de­riv­at­ive cat­egory:

a.

1% for in­terest rate de­riv­at­ives with a re­sid­ual term of up to two years;

b.

2% for cred­it de­riv­at­ives with a re­sid­ual term of up to two years and in­terest rate de­riv­at­ives with a re­sid­ual term of two to five years;

c.

4% for in­terest rate de­riv­at­ives with a re­sid­ual term of more than five years;

d.

5% for cred­it de­riv­at­ives with a re­sid­ual term of two to five years;

e.

6% for for­eign cur­rency de­riv­at­ives;

f.

10% for cred­it de­riv­at­ives with a re­sid­ual term of more than five years;

g.

15% for equity, com­mod­ity and all oth­er de­riv­at­ives.

³ If a trans­ac­tion can be clas­si­fied in more than one de­riv­at­ive cat­egory in ac­cord­ance with para­graph 2, it shall be as­signed:

a.

to the de­riv­at­ive cat­egory with the greatest risk factor in­so­far as this can be clearly iden­ti­fied in the trans­ac­tion in ques­tion;

b.

to the de­riv­at­ive cat­egory with the highest per­cent­age dis­count if the greatest risk factor can­not be clearly iden­ti­fied in the trans­ac­tion in ques­tion.

⁴ The ini­tial mar­gin for a net­ting set is cal­cu­lated in ac­cord­ance with An­nex 3.

⁵ Fin­an­cial coun­ter­parties that use a mar­ket risk mod­el ap­proach ap­proved by FINMA in ac­cord­ance with Art­icle 88 CAO³⁵ for cal­cu­lat­ing po­s­i­tions ac­cord­ing to risk weight­ing, or that use a mar­ket mod­el ap­proved by FINMA in ac­cord­ance with Art­icles 50a to 50d of the In­sur­ance Over­sight Or­din­ance of 9 Novem­ber 2005³⁶ for cal­cu­lat­ing solvency as part of the Swiss Solvency Test (SST), may cal­cu­late the ini­tial mar­gin pay­ment on that basis so long as no in­ter­na­tion­ally har­mon­ised stand­ard mod­el that is re­cog­nised throughout the in­dustry has been es­tab­lished. FINMA shall reg­u­late the tech­nic­al cri­ter­ia that the mod­el ap­proach or the mar­ket mod­el must meet.

⁶ ...³⁷

(Art. 110 Fin­MIA)

¹ The fol­low­ing count as ad­miss­ible col­lat­er­al:

a.

cash de­pos­its, in­clud­ing me­di­um-term notes or com­par­able in­stru­ments is­sued by a bank;

b.

high-qual­ity debt se­cur­it­ies is­sued by a cent­ral gov­ern­ment, a cent­ral bank, a pub­lic-law en­tity with the right to levy taxes, the BIS, the In­ter­na­tion­al Mon­et­ary Fund, the ESM and mul­ti­lat­er­al de­vel­op­ment banks;

c.

high-qual­ity debt se­cur­it­ies of com­pan­ies;

d.

high-qual­ity mort­gage bonds (Pfand­briefe) and oth­er covered debt se­cur­it­ies;

e.

shares of a ma­jor in­dex in ac­cord­ance with Art­icle 4 let­ter b CAO³⁸, in­clud­ing con­vert­ible bonds;

f.

gold;

g.

money mar­ket funds;

h.³⁹

Units in se­cur­it­ies funds in ac­cord­ance with Art­icle 53 of the Fed­er­al Act of 23 June 2006⁴⁰ on Col­lect­ive In­vest­ment Schemes, if:

1.

the units are val­ued daily, and

2.

the se­cur­it­ies funds in­vest solely in as­sets in ac­cord­ance with let­ters a to g or in de­riv­at­ives that hedge such as­sets.

²Col­lat­er­al is deemed to be high value if it is highly li­quid, has a strong track re­cord of pre­serving its value even in a peri­od of stress and can be mon­et­ised with­in an ap­pro­pri­ate peri­od.

³ Rese­cur­it­isa­tion po­s­i­tions are not ad­miss­ible as col­lat­er­al.

⁴ The col­lat­er­al must be val­ued anew each day.

(Art. 110 Fin­MIA)

¹ The value of the col­lat­er­al should be marked down by means of dis­counts on the mar­ket value in ac­cord­ance with An­nex 4.

² An ad­di­tion­al dis­count of 8% must be ap­plied in cases where:

a.

the cur­rency of the ini­tial mar­gin paid is dif­fer­ent from the cur­rency agreed for the ter­min­a­tion pay­ment;

b.

the cur­rency of non-cash vari­ation mar­gins provided is dif­fer­ent from the cur­ren­cies agreed in the de­riv­at­ives con­tract, the net­ting frame­work agree­ment or the cred­it sup­port an­nex for vari­ation mar­gins.⁴¹

³ Coun­ter­parties may as­cer­tain the dis­counts that ap­ply us­ing their own es­tim­ates of mar­ket price and ex­change rate volat­il­ity if they meet the qual­it­at­ive and quant­it­at­ive min­im­um stand­ards in ac­cord­ance with An­nex 5.

⁴ They shall take meas­ures to:

a.

ex­clude risk con­cen­tra­tions with re­spect to cer­tain types of col­lat­er­al;

b.

rule out the pos­sib­il­ity that the col­lat­er­al ac­cep­ted was is­sued by the col­lat­er­al pro­vider or a com­pany as­so­ci­ated with the col­lat­er­al pro­vider;

c.

avoid key cor­rel­a­tion risks with re­spect to the col­lat­er­al re­ceived.

(Art. 94 para. 2 and 107 Fin­MIA)

¹ The duty to ex­change col­lat­er­al in the case of cross-bor­der trans­ac­tions shall also ap­ply, sub­ject to the ex­emp­tion en­vis­aged in para­graphs 2, 2^bis and 2^ter, if the for­eign coun­ter­party of the Swiss coun­ter­party which has the duty to ex­change col­lat­er­al would also be sub­ject to this duty if it had its re­gistered of­fice in Switzer­land.⁴²

² No col­lat­er­al has to be ex­changed if the for­eign coun­ter­party:

a.

has its re­gistered of­fice in a coun­try whose le­gis­la­tion is re­cog­nised by FINMA as be­ing equi­val­ent; and

b.

does not have to ex­change col­lat­er­al un­der the le­gis­la­tion of that coun­try.

^2bis The Swiss coun­ter­party may dis­pense with the pay­ment of ini­tial mar­gins and vari­ation mar­gins to the for­eign coun­ter­party if an in­de­pend­ent leg­al re­view showed that:

a.

the net­ting or guar­an­tee agree­ments vis-à-vis the for­eign coun­ter­party are not def­in­itely leg­ally en­force­able at all times; or

b.

agree­ments on the sep­ar­a­tion of col­lat­er­al are not in line with in­ter­na­tion­ally re­cog­nised stand­ards.⁴³

^2ter It can dis­pense with re­quir­ing the for­eign coun­ter­party to pay ini­tial mar­gins and vari­ation mar­gins if the con­di­tions un­der para­graph 2^bis let­ter a or b are met and:

a.

an in­de­pend­ent leg­al re­view showed that the ac­cept­ance of ini­tial or vari­ation mar­gin pay­ments from the for­eign coun­ter­party in ac­cord­ance with the pro­vi­sions of the Fin­MIA or this Or­din­ance would not be pos­sible; and

b.

the un­se­cured trans­ac­tions con­cluded and out­stand­ing after the entry in­to force of the duty to call for the pay­ment of ini­tial mar­gins and vari­ation mar­gins ac­count for less than 2.5% of all OTC de­riv­at­ives trans­ac­tions, whereby in­tra-group trans­ac­tions are not to be in­cluded in the cal­cu­la­tion.⁴⁴

³ The oth­er risk mit­ig­a­tion du­ties that would re­quire the in­volve­ment of the coun­ter­party may be ful­filled uni­lat­er­ally in­so­far as this cor­res­ponds to re­cog­nised in­ter­na­tion­al stand­ards.

(Art. 111 Fin­MIA)

¹ In­solv­ency law pro­vi­sions do not count as leg­al im­ped­i­ments in the sense of Art­icle 111 let­ter c Fin­MIA.

² Fur­ther­more, Art­icle 91 ap­plies.

(Art. 112 Fin­MIA)

The duty to trade a de­riv­at­ives trans­ac­tion via a trad­ing ven­ue or or­gan­ised trad­ing fa­cil­ity in ac­cord­ance with Art­icle 112 Fin­MIA (plat­form trad­ing duty) shall ap­ply from the point at which FINMA pub­lishes such a duty for the de­riv­at­ives trans­ac­tion in ques­tion:

a.

after the ex­piry of six months: for de­riv­at­ives trans­ac­tions which par­ti­cipants in an au­thor­ised or re­cog­nised cent­ral coun­ter­party con­clude anew with one an­oth­er;

b.

after the ex­piry of nine months: for de­riv­at­ives trans­ac­tions:

1.

which par­ti­cipants in an au­thor­ised or re­cog­nised cent­ral coun­ter­party con­clude anew with oth­er fin­an­cial coun­ter­parties, or

2.

which oth­er fin­an­cial coun­ter­parties that are not small con­clude anew with one an­oth­er;

c.

after the ex­piry of 12 months: for all oth­er de­riv­at­ives trans­ac­tions con­clu­ded anew.

(Art. 112 Fin­MIA)

¹ Coun­ter­parties newly sub­ject to the plat­form trad­ing duty in ac­cord­ance with Art­icle 98 para­graph 2 or Art­icle 99 para­graph 2 Fin­MIA do not have to trade trans­ac­tions they con­cluded pri­or to the start of this duty via au­thor­ised or re­cog­nised trad­ing ven­ues or via op­er­at­ors of an or­gan­ised trad­ing fa­cil­ity.

² De­riv­at­ives trans­ac­tions with coun­ter­parties in ac­cord­ance with Art­icle 94 para­graph 1 Fin­MIA are not covered by the plat­form trad­ing duty.

(Art. 95 and 112 Fin­MIA)

The plat­form trad­ing duty may be ful­filled through trad­ing via a for­eign or­gan­ised trad­ing fa­cil­ity if this fa­cil­ity is sub­ject to for­eign reg­u­la­tion that has been re­cog­nised by FINMA as be­ing equi­val­ent in ana­log­ous ap­plic­a­tion of Art­icle 41 Fin­MIA.

(Art. 94 para. 2 and 114 Fin­MIA)

Cross-bor­der trans­ac­tions do not have to be traded through a trad­ing ven­ue or an or­gan­ised trad­ing fa­cil­ity if the for­eign coun­ter­party:

a.

has its re­gistered of­fice in a coun­try whose le­gis­la­tion is re­cog­nised by FINMA as be­ing equi­val­ent;

b.

is not sub­ject to the plat­form trad­ing duty un­der the le­gis­la­tion of that coun­try.

(Art. 94 para. 2 and 115 Fin­MIA)

For in­tra-group trans­ac­tions, Art­icle 91 ap­plies.

(Art. 116 Fin­MIA)

¹ Fin­an­cial and non-fin­an­cial coun­ter­parties shall reg­u­late, in writ­ing or in an­oth­er form that that al­lows for proof by text, the pro­cesses with which they en­sure ful­fil­ment of the du­ties with re­spect to:⁴⁵

a.

clear­ing via a cent­ral coun­ter­party (Art. 97 Fin­MIA);

b.

de­term­in­ing thresholds (Art. 100 Fin­MIA);

c.

re­port­ing to a trade re­pos­it­ory (Art. 104 Fin­MIA);

d.

risk mit­ig­a­tion (Art. 107 Fin­MIA);

e.

trad­ing via trad­ing ven­ues and or­gan­ised trad­ing fa­cil­it­ies (Art. 112 Fin­MIA).

² Non-fin­an­cial coun­ter­parties which do not want to trade in de­riv­at­ives may set out this res­ol­u­tion in writ­ing or in an­oth­er form that that al­lows for proof by text, in which case they are ex­empt from the duty set out in para­graph 1.⁴⁶

³ Fin­an­cial coun­ter­parties ap­poin­ted by oth­er fin­an­cial or non-fin­an­cial coun­ter­parties to im­ple­ment their du­ties shall reg­u­late the cor­res­pond­ing pro­cesses in ac­cord­ance with para­graph 1 by ana­logy.

(Art. 116 and 117 Fin­MIA)

¹ In the case of non-fin­an­cial coun­ter­parties, the aud­it­or shall re­view wheth­er these coun­ter­parties have taken meas­ures, in par­tic­u­lar to com­ply with the de­riv­at­ives trad­ing du­ties set out in Art­icle 113 para­graph 1 let­ters a to e.

² When car­ry­ing out its audit, it shall take ac­count of the prin­ciples of risk-ori­ented re­view and ma­ter­i­al­ity.

³ The aud­it­or in ac­cord­ance with Art­icle 727 of the Swiss Code of Ob­lig­a­tions⁴⁷ (CO) shall set out the res­ults of its audit in a com­pre­hens­ive re­port for the board of dir­ect­ors in ac­cord­ance with Art­icle 728b para­graph 1 CO.

⁴ The aud­it­or in ac­cord­ance with Art­icle 727a CO shall in­form the re­spons­ible body of the audited com­pany of the res­ults of the audit.

⁵ If the aud­it­or iden­ti­fies vi­ol­a­tions of the pro­vi­sions on de­riv­at­ives trad­ing, it shall in­cor­por­ate these in­to its re­port in ac­cord­ance with para­graphs 3 and 4. It shall set a dead­line for rec­ti­fic­a­tion of the re­por­ted vi­ol­a­tions.

⁶ If the audited com­pany has not ex­ecuted any de­riv­at­ives trans­ac­tions dur­ing the audit peri­od and no de­riv­at­ives trans­ac­tions are out­stand­ing at the end of this peri­od, the re­ports re­quired un­der para­graphs 3 and 4 may be waived.

⁷ The aud­it­or shall re­port the vi­ol­a­tions to the FDF if the com­pany does not rem­edy the vi­ol­a­tions in ac­cord­ance with para­graph 5 by the dead­line set, or if it re­peats these vi­ol­a­tions.

(Art. 120 Fin­MIA)

¹ The equity se­cur­it­ies of a com­pany hav­ing its re­gistered of­fice abroad are deemed to be mainly lis­ted in Switzer­land if the com­pany has to ful­fil at least the same du­ties for its list­ing and main­ten­ance of its list­ing on a stock ex­change in Switzer­land as com­pan­ies hav­ing their re­gistered of­fice in Switzer­land.

² The stock ex­change shall pub­lish which equity se­cur­it­ies of com­pan­ies hav­ing their re­gistered of­fice abroad are mainly lis­ted in Switzer­land.

³ Com­pan­ies hav­ing their re­gistered of­fice abroad whose equity se­cur­it­ies are mainly lis­ted in Switzer­land must pub­lish the cur­rent total num­ber of equity se­cur­it­ies is­sued and the as­so­ci­ated vot­ing rights.

(Art. 125 para. 1 Fin­MIA)

For pub­lic takeover of­fers, Art­icle 115 re­gard­ing main list­ing ap­plies.

(Art. 126 para. 5 Fin­MIA)

¹ The Swiss Takeover Board shall levy a fee for re­view­ing the takeover of­fer whenev­er such an of­fer is made by any party.

² The fee is cal­cu­lated as a pro­por­tion of the value of the trans­ac­tion:

a.

0.05% for amounts up to CHF 250 mil­lion;

b.

0.02% for the part between CHF 250 mil­lion and CHF 625 mil­lion;

c.

0.01% for the part in ex­cess of CHF 625 mil­lion.

³ The fee shall amount to at least CHF 50,000 and a max­im­um of CHF 250,000. In spe­cial cases, the fee may be re­duced or in­creased by up to 50% de­pend­ing on the scope and com­plex­ity of the trans­ac­tion in ques­tion.

⁴ If se­cur­it­ies lis­ted on the stock ex­change are offered for ex­change, the total amount of the of­fer shall be as­cer­tained on the basis of the volume-weighted av­er­age clos­ing price over the last 60 trad­ing days pri­or to sub­mis­sion of the of­fer, or pri­or to the of­fer be­ing re­por­ted to the Swiss Takeover Board. For il­li­quid or un­lis­ted se­cur­it­ies, the fee shall be as­cer­tained on the basis of the aud­it­or's valu­ation.

⁵ In spe­cial cases, in par­tic­u­lar if the tar­get com­pany or a qual­i­fied share­hold­er causes the Swiss Takeover Board an un­usu­al amount of work, the Swiss Takeover Board may also re­quire the tar­get com­pany or the qual­i­fied share­hold­er to pay a fee. This shall amount to at least CHF 20,000, but no more than the fee pay­able by the of­fer­or.

(Art. 126 para. 5 Fin­MIA)

¹ The Swiss Takeover Board shall also levy a fee if it has to make a de­cision in oth­er cir­cum­stances re­lat­ing to takeovers, par­tic­u­larly on wheth­er or not a duty to make an of­fer ex­ists. It may also levy a fee for re­view­ing re­quests for in­form­a­tion.

² The fee shall amount to up to CHF 50,000 de­pend­ing on the scope and com­plex­ity of the case in ques­tion.

³ If the ap­plic­ant sub­sequently sub­mits a takeover of­fer after a com­mit­tee has made a de­cision, the Swiss Takeover Board may sub­tract this amount from the fee set out in Art­icle 117.

(Art. 126 para. 5 Fin­MIA)

The Swiss Takeover Board may re­quest an ad­vance fee pay­ment amount­ing to the prob­able fee from each party.

(Art. 137 para. 1 Fin­MIA)

In or­der to de­term­ine wheth­er the threshold of 98% in ac­cord­ance with Art­icle 137 para­graph 1 Fin­MIA has been ex­ceeded or not, the fol­low­ing shares shall be taken in­to ac­count in ad­di­tion to the shares held dir­ectly:

a.

those with dormant vot­ing rights;

b.

those held by the of­fer­or in­dir­ectly or in con­cert with third parties at the time of the ap­plic­a­tion for can­cel­la­tion.

(Art. 137 Fin­MIA)

¹ If the of­fer­or brings an ac­tion against the com­pany in an at­tempt to have the lat­ter's out­stand­ing equity se­cur­it­ies can­celled, the court shall make this known to the pub­lic and in­form the re­main­ing share­hold­ers that they may par­ti­cip­ate in the pro­ceed­ings. In this re­spect, it shall set a time­frame of at least three months, be­gin­ning on the day of the first an­nounce­ment.

² The an­nounce­ment shall be pub­lished three times in the Swiss Of­fi­cial Gaz­ette of Com­merce. In spe­cial cases, the court may ar­range for ap­pro­pri­ate pub­lic­a­tion in an­oth­er man­ner.

³ If share­hold­ers par­ti­cip­ate in the pro­ceed­ings, they shall be in­de­pend­ent of the de­fend­ant com­pany in their li­ti­gi­ous acts.

⁴ No­tice of the can­cel­la­tion must be pub­lished im­me­di­ately in the Swiss Of­fi­cial Gaz­ette of Com­merce, as well as else­where at the court's dis­cre­tion.

(Art. 142 para. 2 and 143 para. 2 Fin­MIA)

The pro­vi­sions of this Chapter shall de­term­ine the cases in which forms of con­duct that fall un­der Art­icle 142 para­graph 1 and Art­icle 143 para­graph 1 Fin­MIA are per­miss­ible.

(Art. 142 para. 2 and 143 para. 2 Fin­MIA)

¹ The buy­back of own equity se­cur­it­ies at mar­ket price as part of a pub­lic buy­back of­fer (buy­back pro­gramme) in ac­cord­ance with Art­icle 142 para­graph 1 let­ter a and Art­icle 143 para­graph 1 Fin­MIA is per­miss­ible, sub­ject to Art­icle 124, if:

a.

the buy­back pro­gramme lasts a max­im­um of three years;

b.

the scope of the buy­back pro­gramme does not ex­ceed a total of 10% of the cap­it­al and vot­ing rights and 20% of the free float of the equity se­cur­it­ies;

c.

the scope of the buy­back does not ex­ceed 25% of the av­er­age daily volume traded on the reg­u­lar trad­ing line dur­ing the 30 days pri­or to the pub­lic­a­tion of the buy­back pro­gramme;

d.

the pur­chase price is not great­er than:

1.

the last in­de­pend­ently achieved clos­ing price on the reg­u­lar trad­ing line, or

2.

the best cur­rent in­de­pend­ent bid price on the reg­u­lar trad­ing line, provided this is be­low the price re­ferred to in item 1;

e.

no prices are provided dur­ing breaks in trad­ing and dur­ing the open­ing or clos­ing auc­tion;

f.

sales of own equity se­cur­it­ies dur­ing the buy­back pro­gramme are made solely to ful­fil em­ploy­ee par­ti­cip­a­tion pro­grammes or meet the fol­low­ing con­di­tions:

1.

they are re­por­ted to the stock ex­change on the trad­ing day fol­low­ing their ex­e­cu­tion,

2.

they are pub­lished by the is­suer no later than the fifth trad­ing day after their ex­e­cu­tion, and

3.

their scope does not ex­ceed 5% of the av­er­age daily volume traded on the reg­u­lar trad­ing line dur­ing the 30 days pri­or to the pub­lic­a­tion of the buy­back pro­gramme;

g.

the key con­tent of the buy­back pro­gramme is pub­lished by means of a buy­back no­tice be­fore the start of the buy­back pro­gramme and re­mains pub­licly ac­cess­ible for the dur­a­tion of the buy­back pro­gramme; and

h.

the in­di­vidu­al buy­backs are re­por­ted to the stock ex­change as part of the buy­back pro­gram no later than the fifth trad­ing day fol­low­ing the buy­back and are pub­lished by the is­suer.

² The buy­back of own equity se­cur­it­ies at a fixed price or through the is­su­ance of put op­tions in ac­cord­ance with Art­icle 142 para­graph 1 let­ter a and Art­icle 143 para­graph 1 Fin­MIA is per­miss­ible, sub­ject to Art­icle 124, if:

a.

the buy­back pro­gramme lasts for at least ten trad­ing days;

b.

the scope of the buy­back pro­gramme does not ex­ceed a total of 10% of the cap­it­al and vot­ing rights and 20% of the free float of the equity se­cur­it­ies;

c.

the key con­tent of the buy­back pro­gramme is pub­lished by means of a buy­back no­tice be­fore the start of the buy­back pro­gramme and re­mains pub­licly ac­cess­ible for the dur­a­tion of the buy­back pro­gramme; and

d.

the in­di­vidu­al buy­backs are pub­lished by the is­suer no later than one stock mar­ket day after the end of the buy­back pro­gramme.

³ In in­di­vidu­al cases, the Swiss Takeover Board may au­thor­ise buy­backs of a lar­ger scope than those re­ferred to in para­graph 1 let­ters b and c and para­graph 2 let­ter b if this is com­pat­ible with the in­terests of in­vestors.

⁴ It is as­sumed that Art­icle 142 para­graph 1 let­ter a and Art­icle 143 para­graph 1 Fin­MIA are not vi­ol­ated if the pur­chase price paid on a sep­ar­ate trad­ing line is a max­im­um of 2% high­er than:

a.

the last clos­ing price achieved on the reg­u­lar trad­ing line; or

b.

the best cur­rent bid price on the reg­u­lar trad­ing line, provided this is be­low the price re­ferred to un­der let­ter a;

(Art. 142 para. 2 and 143 para. 2 Fin­MIA)

¹ Art­icle 123 para­graphs 1 and 2 shall not ap­ply to the buy­back of own equity se­cur­it­ies if the buy­back pro­gramme is an­nounced or the buy­back of own equity se­cur­it­ies oc­curs:

a.

while the is­suer post­pones the an­nounce­ment of a price-rel­ev­ant fact in keep­ing with stock ex­change pro­vi­sions;

b.

dur­ing the ten trad­ing days pri­or to the pub­lic an­nounce­ment of fin­an­cial res­ults; or

c.

more than nine months after the ref­er­ence date of the last pub­lished con­sol­id­ated clos­ing ac­counts.

² The buy­back at mar­ket price re­mains re­served if this is un­der­taken by:

a.

a se­cur­it­ies firm that was com­mis­sioned pri­or to the start of the buy­back pro­gramme, and the se­cur­ity firm's de­cisions are made with­in the para­met­ers ori­gin­ally pre­scribed by the is­suer without the lat­ter hav­ing any fur­ther in­flu­ence;

b.

a trad­ing unit that is se­greg­ated with in­form­a­tion bar­ri­ers, in­so­far the is­suer it­self is a se­cur­it­ies firm.

³ The para­met­ers un­der para­graph 2 let­ter a must have been set pri­or to pub­lic­a­tion of the buy­back of­fer and may be ad­jus­ted once a month for the dur­a­tion of the buy­back pro­gramme. If the para­met­ers are set or ad­jus­ted with­in one of the peri­ods set out in para­graph 1, the buy­back may be per­formed only after a wait­ing peri­od of 90 days.

(Art. 142 para. 2 and 143 para. 2 Fin­MIA)

The buy­back no­tice in ac­cord­ance with Art­icle 123 para­graph 1 let­ter g and para­graph 2 let­ter c must con­tain at least the fol­low­ing in­form­a­tion:

a.

in­form­a­tion on the is­suer, in par­tic­u­lar:

1.

its iden­tity,

2.

the is­sued cap­it­al,

3.

its hold­ing of its own cap­it­al,

4.

the share­hold­er par­ti­cip­a­tions in ac­cord­ance with Art­icle 120 Fin­MIA;

b.

the nature, pur­pose and ob­ject of the buy­back pro­gramme;

c.

the sched­ule.

(Art. 142 para. 2 and 143 para. 2 Fin­MIA)

Se­cur­it­ies trans­ac­tions which are in­ten­ded to sta­bil­ise the price of a se­cur­ity that has been ad­mit­ted to trad­ing on a trad­ing ven­ue or DLT trad­ing fa­cil­ity in Switzer­land and which fall un­der Art­icle 142 para­graph 1 let­ter a and Art­icle 143 para­graph 1 of the Fin­MIA are per­miss­ible if:⁴⁸

a.

they are car­ried out with­in 30 days of the pub­lic place­ment of the se­cur­it­ies to be sta­bil­ised;

b.

they are ex­ecuted at a price that is no high­er than the is­sue price, or, in the case of trad­ing with sub­scrip­tion or con­ver­sion rights, at a price that is no high­er than the mar­ket price;

c.

the max­im­um peri­od dur­ing which the se­cur­it­ies trans­ac­tions can be car­ried out and the iden­tity of the se­cur­it­ies firm re­spons­ible for car­ry­ing them out are pub­lished be­fore the start of trad­ing with the se­cur­it­ies to be sta­bil­ised;

d.⁴⁹

they are re­por­ted to the trad­ing ven­ue or DLT trad­ing fa­cil­ity at the latest on the fifth trad­ing day fol­low­ing their ex­e­cu­tion and pub­lished by the is­suer at the latest on the fifth trad­ing day after the ex­piry of the dead­line un­der let­ter a; and

e.⁵⁰

the is­suer in­forms the pub­lic at the latest on the fifth trad­ing day fol­low­ing the ex­er­cising of an over­al­lot­ment op­tion (green­shoe) about the tim­ing of the ex­er­cising, as well as the num­ber and type of the se­cur­it­ies con­cerned.

(Art. 142 para. 2 and 143 para. 2 Fin­MIA)

¹ The fol­low­ing se­cur­it­ies trans­ac­tions are per­miss­ible even if they fall un­der Art­icle 142 para­graph 1 let­ter a and Art­icle 143 para­graph 1 Fin­MIA:

a.

se­cur­it­ies trans­ac­tions to im­ple­ment an own de­cision to carry out a se­cur­it­ies trans­ac­tion, in par­tic­u­lar the pur­chase of se­cur­it­ies of the tar­get com­pany by the po­ten­tial of­fer­or with re­gard to the pub­lic­a­tion of a pub­lic takeover of­fer, provided the de­cision was not taken on the basis of in­sider in­form­a­tion;

b.

se­cur­it­ies trans­ac­tions car­ried out in the course of the ful­fil­ment of pub­lic tasks rather than for in­vest­ment pur­poses by:

1.

the Con­fed­er­a­tion, can­tons or com­munes,

2.

the SNB,

3.

the BIS, and

4.

mul­ti­lat­er­al de­vel­op­ment banks in ac­cord­ance with Art­icle 63 para­graph 2 let­ter c CAO⁵¹.

² Para­graph 1 may also be de­clared ap­plic­able to se­cur­it­ies trans­ac­tions car­ried out by the fol­low­ing parties as long as the trans­ac­tions are car­ried out in con­nec­tion with pub­lic tasks and not for in­vest­ment pur­poses, and as long as re­cip­roc­al rights are gran­ted and an ex­cep­tion does not stand in con­tra­dic­tion to the le­gis­lat­ive pur­pose:

a.

for­eign cent­ral banks;

b.

the ECB;

c.

of­fi­cial bod­ies or state de­part­ments that are re­spons­ible for or in­volved in ad­min­is­ter­ing the na­tion­al debt;

d.

the EF­SF;

e.

the ESM.

³ The FDF shall pub­lish a list of the bod­ies covered by para­graph 2.

(Art. 142 para. 2 Fin­MIA)

The com­mu­nic­a­tion of in­sider in­form­a­tion to a per­son does not fall un­der Art­icle 142 para­graph 1 let­ter b Fin­MIA if:

a.

this per­son re­quires the in­sider in­form­a­tion in or­der to ful­fil his or her stat­utory or con­trac­tu­al ob­lig­a­tions; or

b.

the com­mu­nic­a­tion is re­quired with re­gard to the con­clu­sion of a con­tract and the in­form­a­tion hold­er:

1.

makes it clear to the in­form­a­tion re­cip­i­ent that the in­sider in­form­a­tion may not be ex­ploited, and

2.

doc­u­ments the dis­clos­ure of the in­sider in­form­a­tion and the cla­ri­fic­a­tion un­der item 1 above.

¹ The du­ties set out in Art­icle 27, Art­icle 28 para­graphs 2 to 4, Art­icle 30 para­graphs 2 and 3, Art­icle 31, Art­icle 40 second sen­tence, and Art­icles 41 to 43 must be ful­filled no later than 1 Janu­ary 2018.⁵³

^1bis The re­cord-keep­ing and dis­clos­ure du­ties set out in Art­icle 36 para­graph 2 and Art­icle 37 para­graph 1 let­ter d and para­graph 2 must be ful­filled no later than 1 Oc­to­ber 2018. Facts oc­cur­ring between 1 Janu­ary 2018 and 30 Septem­ber 2018 that come un­der these du­ties are to be re­cor­ded and ret­ro­act­ively re­por­ted no later than 31 Decem­ber 2018.⁵⁴

^1ter For­eign branches of Swiss se­cur­it­ies firms and for­eign par­ti­cipants on a trad­ing ven­ue must ful­fil their du­ties un­der Art­icle 36 para­graph 2 and Art­icle 37 para­graph 1 let­ter d and para­graph 2 no later than 1 Janu­ary 2019.⁵⁵

² The ex­emp­tion from the re­port­ing duty set out in Art­icle 37 para­graph 4 may be claimed up to 31 Decem­ber 2017 without an agree­ment in ac­cord­ance with Art­icle 32 para­graph 3 Fin­MIA or an ex­change of in­form­a­tion between FINMA and the com­pet­ent for­eign su­per­vis­ory au­thor­ity.

¹ The duty to re­port to a trade re­pos­it­ory un­der Art­icle 104 Fin­MIA must be ful­filled at the latest:

a.

with­in six months of the first au­thor­isa­tion or re­cog­ni­tion of the trade re­pos­it­ory by FINMA: for de­riv­at­ives trans­ac­tions out­stand­ing at this point if the per­son ob­liged to re­port is not a small fin­an­cial coun­ter­party or a cent­ral coun­ter­party;

b.

with­in nine months of the first au­thor­isa­tion or re­cog­ni­tion of the trade re­pos­it­ory by FINMA: for de­riv­at­ives trans­ac­tions out­stand­ing at this point if the per­son ob­liged to re­port is a small fin­an­cial coun­ter­party or a non-fin­an­cial coun­ter­party which is not small;

c.⁵⁶

by 1 Janu­ary 2028: for de­riv­at­ives trans­ac­tions out­stand­ing at this point in all oth­er cases.⁵⁷

² The dead­lines set out in para­graph 1 shall be ex­ten­ded by six months in each case for the re­port­ing of de­riv­at­ives trans­ac­tions that are traded via trad­ing ven­ues or via the op­er­at­or of an or­gan­ised trad­ing fa­cil­ity.

³ In spe­cial cases, FINMA may ex­tend the time­frames set out in this Art­icle.

¹ The du­ties that ap­ply with re­spect to timely con­firm­a­tion, port­fo­lio re­con­cili­ation, dis­pute res­ol­u­tion and port­fo­lio com­pres­sion in ac­cord­ance with Art­icle 108 let­ters a to d Fin­MIA shall ap­ply by the fol­low­ing dead­lines fol­low­ing the entry in­to force of this Or­din­ance:

a.

after 12 months: for de­riv­at­ives trans­ac­tions out­stand­ing at this point between coun­ter­parties that are not small, and for de­riv­at­ives trans­ac­tions out­stand­ing at this point with a small fin­an­cial coun­ter­party;

b.

after 18 months: for all oth­er de­riv­at­ives trans­ac­tions out­stand­ing at this point.

² The duty to value out­stand­ing de­riv­at­ives trans­ac­tions in ac­cord­ance with Art­icle 109 Fin­MIA shall ap­ply to out­stand­ing de­riv­at­ives trans­ac­tions 12 months after the entry in­to force of this Or­din­ance.

³ The duty to ex­change col­lat­er­al in ac­cord­ance with Art­icle 110 of the Fin­MIA ap­plies only to de­riv­at­ives trans­ac­tions con­cluded after the du­ties un­der para­graphs 4 and 5^bis have entered in­to force.⁵⁸

⁴ The duty to ex­change vari­ation mar­gins shall ap­ply:

a.

from 1 Septem­ber 2016: for coun­ter­parties whose ag­greg­ated month-end av­er­age gross po­s­i­tion of non-cent­rally-cleared OTC de­riv­at­ives at group or fin­an­cial or in­sur­ance group level for the months of March, April and May 2016 is great­er than CHF 3,000 bil­lion;

b.

from 1 Septem­ber 2017: for all oth­er coun­ter­parties.

⁵ The duty to ex­change ini­tial mar­gins shall ap­ply for coun­ter­parties whose ag­greg­ated month-end av­er­age gross po­s­i­tion of non-cent­rally-cleared OTC de­riv­at­ives at group or fin­an­cial or in­sur­ance group level:

a.

is great­er than CHF 3,000 bil­lion for each of the months of March, April and May 2016: from 1 Septem­ber 2016;

b.

is great­er than CHF 2,250 bil­lion for each of the months of March, April and May 2017: from 1 Septem­ber 2017;

c.

is great­er than CHF 1,500 bil­lion for each of the months of March, April and May 2018: from 1 Septem­ber 2018;

d.

is great­er than CHF 750 bil­lion for each of the months of March, April and May 2019: from 1 Septem­ber 2019;

d^bis.⁵⁹

is great­er than CHF 50 bil­lion for each of the months of March, April and May 2020: from 1 Septem­ber 2020;

e.⁶⁰

is great­er than CHF 8 bil­lion for each of the months of March, April and May 2020: from 1 Septem­ber 2021.⁶¹

^5bis The duty to ex­change col­lat­er­al ap­plies from 1 Janu­ary 2024 for non-cent­rally cleared OTC de­riv­at­ives trans­ac­tions that are op­tions on in­di­vidu­al equit­ies, in­dex op­tions or sim­il­ar equity de­riv­at­ives such as de­riv­at­ives on bas­kets of equit­ies.⁶²

⁶ FINMA may ex­tend the time­frames set out in this Art­icle in or­der to take ac­count of re­cog­nised in­ter­na­tion­al stand­ards and for­eign leg­al de­vel­op­ments.

The duty to have an audit per­formed by the aud­it­ors in ac­cord­ance with Art­icle 114 shall ap­ply 12 months fol­low­ing the entry in­to force of this Or­din­ance.

¹ For oc­cu­pa­tion­al pen­sion schemes and in­vest­ment found­a­tions in ac­cord­ance with Art­icles 48 to 60a of the Fed­er­al Act of 25 June 1982⁶⁴ on Oc­cu­pa­tion­al Old Age, Sur­viv­ors' and In­valid­ity Pen­sion Pro­vi­sion, the clear­ing duty set out in Art­icle 97 of the Fin­MIA shall not ap­ply up to 30 Septem­ber 2021 for de­riv­at­ives trans­ac­tions that these in­sti­tu­tions enter in­to with a view to re­du­cing risk in ac­cord­ance with Art­icle 87.⁶⁵

^1bis The trans­ition­al peri­od in ac­cord­ance with para­graph 1 shall be ex­ten­ded to 30 Septem­ber 2022.⁶⁶

^1ter The trans­ition­al peri­od in ac­cord­ance with para­graph 1 shall be ex­ten­ded to 30 Septem­ber 2023.⁶⁷

² The Fed­er­al De­part­ment of Home Af­fairs may ex­tend the time­frame set out in this para­graph 1 in or­der to take ac­count of re­cog­nised in­ter­na­tion­al stand­ards and for­eign leg­al de­vel­op­ments.

The amend­ment of oth­er le­gis­lat­ive in­stru­ments is set out in An­nex 1.

This Or­din­ance comes in­to force on 1 Janu­ary 2016.