Switzerland approves new financial sector regulation law
The Swiss Federal Council has approved legislation that will overhaul the regulation of financial markets, and, in particular, of derivatives trading. The aim of the operation is to place Swiss legislation in line with international standards and to respond to market developments.
According to the Council, the Financial Market Infrastructure Act (FIMA) will strengthen the stability and competitiveness of Switzerland's financial centre: it will consolidate provisions that are currently contained within numerous laws as well as add new provisions. The FIMA contains the Stock Exchange Act's provisions on the disclosure of shareholdings, public offerings, insider trading, and market manipulation, along with new regulations for derivatives trading.
The FIMA gives a corresponding legal basis for the obligation to conduct derivatives transactions via a stock exchange or other trading facility. The Act also replaces the vague definition of “institution which is similar to a stock exchange” with the terms “multilateral trading facility” and “organized trading facility”. Multilateral trading facilities are to be subject to regulations that are similar to those for stock exchanges, but organised trading facilities are not considered to be independent financial market infrastructures. The operator of an organized trading facility must comply with specific transparency requirements.
Lastly, the FIMA provides a uniform set of regulations on administrative assistance. Consistent with the Tax Administrative Act, the FIMA makes it possible to respond to a requesting authority's request for administrative assistance prior to the notification of the client, if notifying the client in advance would compromise the objective of the authority in requesting that information.
However, this requirement will not be enforced until Switzerland's partner states have introduced comparable rules.