SIX is to establish a central trade repository for derivative transactions in cooperation with Swiss banks.
This will enhance the transparency and traceability of derivative transactions, in accordance with regulatory requirements, and help improve financial market stability. The Swiss Financial Market Infrastructure Act (FMIA), which is currently in consultation, represents the legal basis for the creation of a trade repository.
The act is set to enter into force at the end of 2015 or early 2016. The aim is to enhance the transparency and traceability of both over-the-counter (OTC) and exchange-traded derivatives.
This information will allow supervisory authorities to identify risk concentrations and systemic risk at an early stage. By establishing a trade repository for derivative transactions, the new Swiss legislation implements the G20 obligations agreed in 2009 in response to the financial crisis.
The trade repository provided by SIX will record the details of derivative transactions that must be reported by banks and other counterparties.
Following validation and a consistency check, the information collected will be passed on to the supervisory authorities, as well as aggregated and made available to the public in anonymised form.
