FinfraG overview

The Swiss Financial Market Infrastructure Act, also known under the German denomination FinfraG (Finanzmarktinfrastrukturgesetz), came into force on 1 January 2016. It regulates:

  • The organisation and the operation of financial market infrastructures, for example, stock exchanges and central counterparties;
  • The trading of derivatives;
  • The conduct of business rules, for example, insider trading and market manipulations, shareholding disclosures and public takeovers offers.

The main rationale behind FinfraG is to align the Swiss regulatory framework with international standards, in particular with the EU regulations (MiFID II, MiFIR, EMIR and CSDR) with a view to preserving Switzerland's global competitiveness.

Specifically regarding derivatives trading, FinfraG introduces broad changes to the Swiss derivatives market and aims at increasing transparency, reducing counterparty and operational risk in trading as well as enhancing market integrity and oversight. It introduces four main duties for derivatives trading:

  • Reporting to a trade repository
  • Mandatory clearing through a central counterparty for large counterparties (for both OTC derivatives and ETDs)
  • Trading through a stock exchange or a trading system
  • Risk mitigation - OTC derivative contracts not cleared through a central counterparty will be subject to the following obligations:
    • Exchange of transaction confirmations between counterparties;
    • Portfolio reconciliation;
    • Dispute resolution; Portfolio compression;
    • Daily valuation;
    • Margin requirements and exchange of initial margin

REGIS-TR clients can leverage REGIS-TR existing infrastructure (including connectivity and similar message formats) to fulfil both EMIR and FinfraG reporting obligations, thereby building synergies in their reporting requirements. REGIS-TR's vision is to provide its customers with a one- stop-shop, and one common connectivity and graphical user interface (GUI) for all their European regulatory reporting requirements.