Swissbanking Fmia Agreement

In addition, the Swiss financial sector has a long tradition of self-regulation by self-regulatory organisations (“SROs”). In this context, FINMA has recognized several self-regulatory guidelines and SAR agreements as minimum standards, integrated them into the regulatory framework and submitted them to enforcement measures (see THE 2008/10 FINMA circular on self-regulation as a minimum standard). An important example of self-regulation is the agreement on the Swiss bank`s code of conduct with regard to the implementation of due diligence 2020 (“CDB 20”) by the Swiss Bankers Association (SBA), which sets out the know-customer your guidelines that must apply to banks and securities dealers. The main advantage of using such a high-level agreement for counterparties who have already complied with a 2013 EMIR Portfolio Reconciliation Protocol, Resolution and Disclosure Protocol, is to maintain processes that meet the requirements of the FMIA. Counterparties may also consider concluding the IMFA agreement published by the Swiss Banking Association, which provides for a portfolio voting procedure, a dispute resolution procedure and an exchange of confirmations in accordance with the rules of the FMIA. In addition, unlike the ISDA documentation, the FMIA agreement provides for a self-classification letter that can be used by all counterparties for the classification itself. However, we find that at this stage, none of these agreements are attacking margin rules. Finally, some large companies have developed ad hoc documentation to define IMFA procedures that apply exclusively to their relationship with a given counterparty. This documentation is usually tailor-made. Over-the-counter derivatives trading commitments are primarily implemented by the Amfederal Act on Financial Market Infrastructure and Market Conduct in Securities and Derivatives Trading of June 19, 2015 (FMIA), which came into effect on January 1, 2016 and was last amended on January 1, 2020 with effect on January 1, 2020. The IMFA is conceived as a framework law which provides, in addition to the usual enforcement powers conferred on the Federal Council, a complete transfer of powers to both the Federal Council and FINMA, the regulatory authority. While a financial market infrastructure is of systemic importance, the Swiss National Bank (SNB) is the supervisory authority.

With regard to derivatives trading, the IMFA imposes a number of obligations on Swiss counterparties, namely trade relations; Compensation several risk mitigation obligations, including portfolio voting, agreement on dispute settlement mechanisms and obligation to exchange guarantees (initial margin and margin of variation) for OTC derivatives transactions that are not covered by clearing; and that they still need to be used in a binding way. There is no common practice. As a general rule, legal advice on the conclusion of a framework contract and not on the conclusion of derivatives transactions is sought. However, in the case of complex structured over-the-counter derivatives transactions, which are the case of opposability, and in the case of a publicly traded underlying capital instrument, advice on disclosure obligations is quite common. In order to facilitate the settlement of SIBs, Swiss law has been amended to empower FINMA to order a notice of settlement for all termination rights and automatic termination clauses triggered by the initiation of a resolution procedure for a period of two working days (Article 30 bis BankA). In order to ensure the enforceability of these powers, all banks and securities dealers are required to take steps to ensure that agreements that are not governed by Swiss law and that the jurisdiction of the Swiss courts provide for contractual recognition of the stay of a resolution.

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