On 3 April 2017, FINMA published guidance on reporting
requirements and trade repository (FINMA Guidance 02/2017:
Financial Market Infrastructure Act: Reporting Requirements)
announcing that, on 1 April 2017, it authorized a Swiss trade
repository, SIX Trade Repository AG, Zurich, and recognized a
foreign trade repository, Regis-TR S.A., Luxembourg. These two
decisions trigger the phase-in period for the trade reporting
duties under article 104 Federal Act on Financial Market
Infrastructures and Market Conduct in Securities and Derivatives
Trading of 19 June 2015 (Financial Market Infrastructure Act,
FMIA, SR 958.1). Reporting Duty pursuant
to article 104 FMIA
Pursuant to article 104 FMIA, subject to certain limited
exceptions, Swiss counterparties are required to report their
derivatives trades to a trade repository which has been authorized
or recognized by FINMA (article 104 FMIA).
Unlike the EU Regulation 648/2012 of the European Parliament and
of the Council of 4 July 2012 on OTC derivatives, central
counterparties and trade repositories, (EMIR),
which requires both counterparties to report their trades, FMIA
provides for a one-way reporting obligation with the following
The central counterparty (CCP), when the trade is cleared
centrally (article 104 (4) FMIA);
Financial counterparties (FC) report when dealing with
non-financial counterparties (NFC) (article 104 (2) (a) FMIA);
Non-small counterparties (FC+ or NFC+) report when dealing with
small counterparties (FC- or NFC-) (article 104 (2) (b) (1) and (3)
If two counterparties of the same category trade together, the
selling counterparty is required to report, unless the parties
agree otherwise (article 104 (2) (b) (2) and (3) FMIA).
As a matter of principle, this cascade also applies when a Swiss
counterparty trades with a foreign counterparty. However, if the
foreign counterparty does not report to an authorized or recognized
trade repository, the Swiss counterparty will need to report, thus
potentially imposing a reporting obligation on a NFC- (article 104
(3) FMIA). The same rule also applies to trades with exempted
counterparties (article 92 (1) Ordinance on Financial Market
Infrastructure and Market Conduct in Securities and Derivatives
Trading of 25 November 2015 (Financial Market Infrastructure
Ordinance, FMIO, SR 958.11)). In contrast, trades among NFC- are
not subject to a reporting obligation (article 104 (3) FMIA).
Until the publication of FINMA Guidance 02/2017, the reporting
duty was on hold.
Authorisation and Licensing by FINMA
On 1 April 2017, FINMA
authorized SIX Trade Repository AG, Zurich, to operate as a
Swiss trade repository in accordance with article
74 FMIA; and
recognized Regis-TR S.A., Luxembourg, as a foreign trade
repository in accordance with article 80 FMIA, but only for
the receipt of reports on derivatives transactions in
accordance with the FMIA.
Both trade repositories are entitled to receive reports about
derivatives transactions from persons subject to reporting
requirements in accordance with article 104 and 105 (2) FMIA in
conjunction with article 93 FMIO.
However, Regis-TR-S.A. was not recognized for acting as trade
repository under other regimes. Therefore, Swiss counterparties
will not be able to rely on substitute compliance, using filings
under EMIR to meet their obligations under the FMIA.
Phasing-in of the Reporting Duty
The authorization of SIX Trade Repository AG and the recognition
of Regis-TR S.A. triggered the phasing in of the requirements for
Swiss counterparties to report their derivatives transactions,
based on the following schedule (article 130 (1) FMIA):
FC+ and CCP will be subject to the reporting duty from
1 October 2017;
FC- or a NFC+ will be subject to the reporting duty from
1 January 2018; and
in all other cases counterparties are required to fulfill their
reporting obligation as of 1 April 2018
As suggested above, the latter case will apply mainly when a
foreign counterparty does not report the trade. In contrast,
transactions between two NFC- do not have to be reported.
The duty to report derivatives under the FMIA applies to both
OTC and exchange traded derivatives. In case derivatives
transactions are executed through a trading venue or an organized
trading facility, the aforementioned deadlines are extended by six
months (article 130 (2) FMIO).
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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