Based on the FMIA, SESTA, the corresponding ordinances and circular, trading participants of Swiss trading venues and securities dealers are obliged to report all transactions to the Reporting Office of the trading venue for transparency and market integrity purposes. Exemptions from the reporting obligation are governed by FMIO, SESTO and FINMA Circular 2008/11 (e.g. for foreign trading participants to avoid double reporting).
In addition to the current practice participants and securities dealers have two new requirements:
a) Submit the “beneficial owner” information for client trades, and
b) Report trades in derivatives where the underlying instruments are admitted to trading on a Swiss trading venue.
Within their new circular 2018/2 FINMA has outlined the requirement for the beneficial owner information. The requirement is:
- For individuals; Country Code (ISO 3166-1 alpha2) + Date of Birth (YYYYMMDD) + bank-internal code
- For institutions; Legal Entity Identifier (LEI), Bank Identifier Code (BIC) or Commercial Register Number and Country Code
These changes become effective on 1.1.2018.
Note: SIX Securities Services has joined forces with The Depository Trust & Clearing Corporation (DTCC) to offer Swiss entities an easy straight forward way to apply for LEIs.
The reporting duty to a trade repository for derivatives transactions remains.
Further details can be found on the website of SIX Securities Services.
Due to the additional requirement to submit the beneficial owner information, current workflows and processes need to be adapted. A new attribute will be introduced on the relevant interfaces and the trading venue participants and securities dealers can submit this information with a trade/transaction report (post-trade).
It is foreseen that the reporting office will also accept transaction reports as defined in MiFIR RTS 22 and confirmed in the final circular 2018/2 by FINMA.
Further details and the relevant technical interface specifications will be published early Q2 2017. Implementation is scheduled for SMR7 (2017).
Art. 39: Reporting duty of participants; Art. 104 et seq.: Reporting to a Trade Repository
Art. 129: Financial market infrastructures
Art. 2 et seq.: Reporting duty
Art. 58a: Transitional provisions of the amendment of 25 November 2015
- FINMA Circular 2018/2 Reporting Duty (Final)
Art. 26: Obligation to report transactions
RTS 22: Obligation for the reporting of transactions to competent authorities
- ESMA Guidelines on transaction reporting, order keeping and clock synchronisation under MiFID II
Q: A member is trading on the SIX Swiss Exchange on the public order-book (on-exchange). Are the executions deemed to be automatically transaction reported to the SIX Swiss Exchange Reporting Office?
A: No. A separate transaction report needs to be submitted. However SIX Swiss Exchange will introduce a service by which transaction reports will be automatically derived from nostro executions. For client (agency) executions separate transaction reports are always required to submit the necessary beneficial owner information.
Q: How can members/securities dealers submit the beneficial owner information?
A: Members and securities dealers should use a transaction report with a reference to the original trade (if available). A transaction report can be submitted via GUI or file interface. If a trade has been allocated to several different beneficial owners, a separate transaction report is required for each of them.
Q: Based on the final FINMA circular 2018/02 members can also use the MiFIR RTS 22 format to report transactions. How will the technical implementation look like?
A: SIX Swiss Exchange will provide a new file upload interface for the submission of transaction reports based on RTS 22.
Q: What kind of instrument identifier can be used to report derivative transactions (Art. 37, para 2 FMIO) which do not have an ISIN?
A: Members should use a CFI-Code and/or a free text field in addition to the mandatory underlying ISIN information.