The purpose of this Newsflash is to inform Swiss market participants that FINMA has authorized the first Swiss trade repository (SIX Securities Services) and recognized the first foreign trade repository (REGIS-TR) for Switzerland. The authorization and recognition of the trade repositories trigger the start of the reporting obligation under the Swiss Financial Market Infrastructure Act (FMIA).
This Newsflash follows up on Lenz & Staehelin's Newsflash published in July 2016 regarding the reporting requirement for derivatives transactions.
Pursuant to Art. 104 FMIA, financial and nonfinancial counterparties as well as central counterparties, but with the exception of transactions between small non-financial counterparties, have to report to a trade repository authorized or recognized by FINMA the material characterristics of all their derivatives transactions. The reporting obligation is phased in over a period of 6 to 12 months depending on the categorization of the counterparties starting on the date of the first authorization or recognition of a trade repository by FINMA.
On April 3rd, 2017, FINMA officially announced the authorization of the first Swiss trade repository (SIX Securities Services) and the recognition of the first foreign trade repository (REGIS-TR) in Switzerland. Lenz & Staehelin advised REGIS-TR in the process of obtaining recognition from FINMA.
Applicable deadlines for the reporting obligation
In its communication FINMA announced that open derivatives transactions must be reported from the following dates at the latest:
> From 1 October 2017 if the counterparty which is required to report is a central counterparty (CCP) or a financial counterparty (FC) which is not small;
> From 1 January 2018 if the counterparty which is required to report is a small financial counterparty (FC-) or a non-financial counterparty (NFC) which is not small;
> From 1 April 2018 for all other outstanding derivatives transactions. However, transactions between two small non-financial counterparties (NFC-) do not have to be reported.
Pursuant to Art. 130 para. 2 FMIO, the above reporting obligation deadlines shall be extended by six months for derivatives transactions that are traded via trading venues or via the operator of an organized trading facility.
Lastly, it is noteworthy to mention that, at present, the recognition granted by FINMA to REGIS-TR is restricted to the receipt of reports under Swiss law, i.e. REGIS-TR is not yet recognized in Switzerland for the purpose of EMIR reportings. Consequently, it is not currently possible for Swiss market participants to make reports about derivatives transactions which are made to REGIS-TR under EMIR and thereby to discharge the Swiss law reporting requirements by substituted compliance.