In response to legal developments in financial hubs like the EU and the UK, the Swiss financial markets regulator has extended the transitional period for exchanging collateral for non-centrally cleared over-the-counter (OTC) derivative transactions involving options on equities and indices.

This decision extends the transitional period of such transactions until January 2026 as a strategic response to aligning with global legal developments. The initiative aims to protect Swiss derivatives traders from any potential disadvantages from evolving international regulations.

FINMA's Response to Global Regulations

The landscape of financial regulations in key global centers has been undergoing significant changes. This has compelled FINMA to reevaluate and align its regulations accordingly. Recently, the Canadian securities regulatory authorities introduced a business conduct rule aimed at governing OTC derivatives dealers and advisors.

Set to become effective by September 2024, this rule marks a pivotal step in aligning Canadian standards with global practices, Finance Magnates reported. It's designed to fortify transparency, accountability, and ethical practices within the OTC derivatives market.

Facing a New Regulatory Framework

This regulation encompasses mandates related to fair dealing, conflict of interest management, reporting non-compliance , and diligent recordkeeping. It is designed to align with international benchmarks. Thus, the Canadian watchdog has emphasized the importance of these obligations, highlighting their role in fortifying market integrity.

Recently, FINMA experienced a surge in regulatory developments, exemplified by its issuance of 950 licenses to portfolio managers and trustees. This substantial number of granted licenses represents a culmination of 1,749 license applications received by FINMA. It underscores a rising demand for financial services in Switzerland.

Securing a license from FINMA involves meticulous steps commencing with self-registration. These stages, as outlined by the regulator, ensure a systematic approach to evaluating and approving portfolio managers and trustees.

FINMA's guidance involves a risk-based monitoring model, emphasizing rigorous scrutiny aligned with the assessed risk levels of the entities. Besides that, the Swiss regulatory landscape has evolved with the enactment of the Financial Institutions ACT and the Financial Services Act.