Switzerland has adapted its national framework of rules applicable to the trade in derivatives, in line with the G20 commitments and in keeping with the recommendations of the Financial Stability Council. Adopted in 2015, the Financial Markets Infrastructure Act (FMIA) brings Switzerland in line with various international legal counterparts. At its core, it introduces three key requirements for derivatives trading: mandatory compensation, mandatory reporting and mandatory risk reduction and management.
For commodity trading companies, the coming into force of the FMIA brought new reporting requirements involving the need for significant systems and processes upgrades, and increased working capital needs to cover clearing fees, margins and collateral. Swiss market participants were subject to a phased entry into force of derivatives transaction reporting.
Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (2015)
STSA Working Paper on the Financial Market Infrastructure Act (FMIA / FinfraG / LIMF)
(this document is password protected. Please contact the STSA Secretariat to download your copy)
STSA works with its members to actively inform the debate and to ensure fit-for-purpose rules that reflect the specificities of commodity trading activities and that ensure a level-playing field at the international level. The STSA Regulation Committee brings together heads of compliance and legal experts from STSA members to discuss changes in the legal and regulatory framework, with a focus on Swiss rules.
STSA has prepared together with its members a step-by-step guide for small trading companies under FMIA/FinfraG that details the key operational actions that companies should carry out. The guide was published in December 2017:
STSA Step-by-Step Guide for Small Trading Companies under FMIA/FinfraG
With the decision of the Federal Council to postpone the mandatory reporting of trades for small companies (qualifying as "small non-financial companies") until 1 January 2024, trading firms have additional time to prepare for full implementation and can concentrate on documentation and risk reduction requirements. This is under review, together with the FMIA as a whole to take into consideration the latest international developments.
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Swiss policy on commodities is set at the federal level and involves several federal departments such as the Foreign Affairs Department, the Department for the Economy and the Federal Department of Finance. In 2018, Swiss authorities published an in-depth background report on commodities, setting the roadmap for future regulation of the industry in Switzerland.
Download the 2018 Swiss federal report