FINMA’s recent approval of SIX and REGIS-TR as trade repositories for the Financial Market Infrastructure Act (FMIA) triggers the date for Swiss companies to begin reporting derivatives. Swiss NFC- firms must now analyze their portfolio and counterparties to assess the regulation’s impact.
The Swiss FMIA entered into force at the beginning of 2016. Embedded in the global effort to regulate the financial market, FMIA implements the Pittsburgh G20 summit procedures. Besides other areas, it regulates derivatives trading similar to the Dodd-Frank in the US and EMIR in the EU.
Comparable in scope to EMIR, FMIA’s obligations can be divided into four main tasks:
- Identification of FMIA derivatives (group level)
- Self-classification as NFC- (group level)
- Risk mitigation requirements for OTC derivative trading (Swiss-entity level)
- Reporting requirements for all derivatives (Swiss-entity level)
Overall the Swiss regulator is aiming to create requirements equivalent to EMIR. While companies can rely on slightly adjusted EMIR solutions for the identification of derivatives, self-classification and risk mitigation techniques – the impact of the reporting obligation was not clear until April 2017.
Self-classification, identification of FMIA derivatives and proof of hedging purpose is required on the group level and must already be implemented in 2017. Risk mitigation requirements are relevant on a Swiss-entity level and enter into force this year.