## 1cheea2025010-source-pdf ## Source details **Canonical URL:** [1cheea2025010-source-pdf](https://www.imf.org/-/media/files/publications/cr/2025/english/1cheea2025010-source-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/cr/2025/english/1cheea2025010-source-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/cr/2025/english/1cheea2025010-source-pdf.pdf.json) --- ### Executive summary — landscape, purpose, and main findings - The Swiss FMI landscape is efficient and reflective of the advanced nature of the country’s financial market. - Switzerland hosts three domestic, systemically important FMIs owned by a single group (SIX Group / SGA): a CCP (SIX x-clear Ltd. — SXC), a CSD (SIX SIS Ltd. — SIS), and the RTGS Payment System (SIC). - Three foreign FMIs are considered systemically important by Swiss authorities: two CCPs (LCH Ltd and Eurex Clearing AG) and a foreign exchange Payment System (CLS). - The note’s main objective: analyze the potential for FMI-related risks to financial stability in Switzerland, assess supervision and oversight, review risk management arrangements at the three domestic systemically relevant FMIs, and provide insights into DLT-based FMIs and settlement of tokenized securities with wCBDC. ### Regulatory alignment, supervisory roles, and resource concerns - Swiss FMI regime largely aligned with the CPMI-IOSCO Principles for Financial Market Infrastructures (PFMI). - FINMA: responsible for supervising and authorizing FMIs (except PSs and FMIs operated by/on behalf of SNB); consolidated supervision for FMIs part of a financial group; resolution authority for FMIs. - SNB: oversight of systemically important CCPs, CSDs and PSs; designates FMIs and business processes as systemically important in consultation with FINMA. - FINMA and SNB disclose policies and have cooperative arrangements (including a “Framework for FMI stress and crisis situations” finalized June 2021 and tested annually). - Resource constraints: - Market Infrastructure and Derivatives Section total staffing: 8.8 FTE. - Within that, 3.8 FTE allocated to the Supervision of Market Infrastructures (SMI) Group and 5 FTE in the Legal Market Infrastructures Group. - Within SMI, a single FTE is allocated to supervision of the CCP, the CSDs (SIS and SDX), and the TR altogether (with support of the Team Lead). - FINMA increased FTE by one since the last FSAP; resource shortfall leaves less than a single FTE allocated to supervision of each domestic FMI and creates vulnerability to prolonged unavailability of experts. - Recommendation emphasis: increase FINMA resources for FMI supervision and increase number of on-site reviews (Timing: I. Priority: H. Responsibility: FINMA). ### Group structure, concentration, and cross-border implications - SGA operates exchange, CCP, CSD, TR, RTGS, retail payments, financial data and card services; UBS holds more than a third of the shares of SGA following its acquisition of Credit Suisse and is also SGA’s dominant client. - SGA’s acquisition of BME Group and Regis-TR (Luxembourg) increases relevance of EU regulatory frameworks and requires expanded cooperation with Spanish authority (CNMV). - Integration and outsourcing of key functions to SIX Group entities may expose FMIs to additional risks; authorities should expand participation in on-site inspections and cooperation with CNMV on recovery and resolution planning, including testing (Timing: I. Priority: H. Responsibility: FINMA). ### FMI risk management, resilience, recovery and resolution - General: - The three domestic systemically important FMIs have implemented risk management frameworks observing the PFMI, with further changes envisaged. - Recovery plans exist for SXC and SIS and are updated annually; FINMA deemed them credible but tasked FMIs to continue improvements. - FINMA has developed resolution scenarios for SXC and SIS, but finalization and adoption of resolution plans are contingent on FinMIA revision and are unlikely before 2028–2029. - Specific recommendations: - Ensure adherence of SXC’s new initial margin model (SREC) to the PFMI and monitor implementation (Timing: C. Priority: H. Responsibility: FINMA, SNB). - Require SXC and SIS to improve and test recovery plans, include group-specific scenarios and failures of other group entities, and carry out periodic simulation and scenario exercises (Timing: I. Priority: H. Responsibility: FINMA). - Finalize and adopt resolution plans for SXC and SIS as soon as possible; expedite FinMIA revision to provide necessary resolution tools (Timing: ST. Priority: H. Responsibility: FINMA; FDF for FinMIA). ### SIX x-clear (SXC) — risk model change and operational resilience - Role and context: - SXC is a systemically important CCP clearing equities and some bonds traded on 26 European trading venues; 62 current clearing members. - Interoperability arrangements with LCH Ltd and Cboe Clear; recognized as a third country CCP by ESMA. - Initial margin models: - Current: SECOM (multilayered conservative approach; Step 1: 99.7 percent VaR; Step 2: bucketed into 8 risk buckets; Step 3: add-ons/offsets) and SCP (Monte Carlo VaR, 99 percent confidence, close-out period two days). - Future: SREC (Hybrid VaR): 75 percent Monte Carlo VaR component and 25 percent Stress VaR (dual lambda approach). Introduction contingent on supervisory approval and likely to result in lower margin requirements. - Supervisory concern: SXC has yet to establish a track record of successfully implementing a new initial margin model; supervisory scrutiny on model performance and anti-procyclicality required. - Default fund, stress testing, liquidity: - Default fund size defined by stress tests; daily stress tests assume default of the two financial groups creating the largest aggregate credit exposure to SXC. - Liquidity: SIS is main liquidity provider; SXC has direct access to SNB central bank facility and can pledge eligible collateral; committed credit lines with custodian banks; collateral only in cash in highly liquid currencies and securities eligible for SNB repos. - Operational resilience and governance: - Systems fully automated with guaranteed recovery times < two hours per Business Impact Analysis (BIA); BCM integrated into SGA-wide arrangements. - Engagement with members via Risk Committee and Member Advisory Committee; margin simulation tool provided to members. - SXC not subject to Supervisory Stress Tests (e.g., ESMA ST); plans to participate in 2025 global fire drill exercise. ### SIX SIS (SIS) — CSD and global custodian functions - Role and systemic importance: - SIS is a systemically important CSD and global custodian; operates SECOM (SSS) and is central to Swiss repo market and SNB monetary policy implementation; designated systemically important by SNB. - Risk tools and liquidity: - Settles under Delivery-versus-Payment (DvP); uses central bank money via link to RTGS (SIC) where possible. - Credit limits and conservative collateral requirements; investments via reverse repos in SNB-eligible securities only. - SIS provides liquidity support to SXC via a covered multi-currency credit line and broker lien arrangements. - Operational resilience and outsourcing: - Core systems fully automated with guaranteed recovery times < two hours; redundancy and real-time mirroring across two sites. - SIS outsources many functions to SIX Group Services under SLAs monitored via a Master Intercompany Agreement with KPIs (e.g., FTE per service, IT-service availability). - Losses from default of sub-custodian are borne by participant, not the CSD. - Participant engagement: - Forums at strategic, operational and technical levels (Swiss SPTC, User Groups, Technical working groups). - Recommendation: require SIS to test recovery procedures with participants and to include group-failure scenarios in recovery plans. ### SIC (RTGS) — role, resilience, and contingency - SIC is the RTGS payment system for Swiss francs operated by SIX Interbank Clearing Ltd on behalf of SNB; RTGS functionality is systemically important. - Key features: - Participants generally must hold a sight deposit account at SNB; six operators can participate without own sight deposit account (including SIS/SECOM). - Settlement rules: split payments > CHF 100 million where possible; settlement algorithm resolves gridlocks; insufficient-cover payments enter wait file and are deleted at end of day if unprocessed. - Liquidity access: intraday facility and liquidity shortage financing facility from SNB (interest-free intraday, repayable same clearing day; both collateralized). - Business continuity: two data centers strategy, cold standby, annual batch-processing (“mini-SIC”) tests including participants. - Recovery and withdrawal: - SNB requested SIC Ltd develop a withdrawal plan; service contract includes an agreed notice period of 36 months. ### SDX, DLT, and Project Helvetia — tokenization and wCBDC pilot - SDX overview: - Launched 2019 as a DLT-based securities settlement platform; granted CSD and exchange licenses in September 2021. - SDX discontinued its digital asset trading services in June 2025 and plans to voluntarily return its exchange license in 2025 to consolidate trading into SIX Swiss Exchange. - As of April 2025: CSD had 12 participants; exchange had 3 participants. Total digital bonds issuance on SDX approximately CHF 1.5 billion. - Settlement methodology: - SDX does not generally settle in central bank money; issues a private tokenized Swiss franc backed 1-to-1 with reserves at its account at SNB; tokenization/detokenization is triggered by participating banks through SIC using standardized ISO messages. - SDX hosts nodes (central bank node, commercial bank nodes), controls notary node and an observer node; SNB is granted access to observer node and reconciles wCBDC holdings in its systems. - Project Helvetia (multi-phased wCBDC initiative): - Phase I (2020): two PoCs showed technical and legal feasibility (issuing wCBDC directly on platform and linking SDX to SIC). - Phase II (2021): integrated wCBDC into core systems and ran end-to-end test transactions in test environments; considered monetary policy implications. - Phase III / Helvetia pilot (since December 2023; renamed mid-2024): production environment where SNB makes wholesale CBDC available for settlement of commercial tokenized bond transactions; pilot set to run at least until 2027. - Helvetia pilot expansion June 2025 included settlement with traditional central bank money (RTGS link) via BX Digital connecting to SIC. - wCBDC availability and constraints: - During Helvetia Phase III initially: wCBDC available intra-day on pre-agreed “Helvetia days” only; tokenized and detokenized same day between 8 am and 3 pm; in 2024, SDX registered 8 Helvetia days. - SNB successfully issued digital SNB Bills in June 2024 totaling CHF 64 million to five Helvetia pilot banks (seven-day private placement). - SNB extended availability of wCBDC on SDX in May 2025 to every day, while keeping intra-day limitation. - SNB has adopted a technology-neutral stance and has not insisted on wCBDC as the future standard; remains open to settlement through SIC or bankruptcy-protected tokenized private money forms. - Risks and policy implications: - Settlement using SDX’s private token is suboptimal: credit risk for investors and participants, balance-sheet charges, and private token is not bankruptcy-remote. - Recommendation: SNB should establish a strategy clarifying conditions under which it could issue wCBDC on third-party operated platforms and expand institutional deliberations on permanent wCBDC issuance requirements (Timing: ST/MT. Priority: M/L. Responsibility: SNB). - FINMA should monitor SDX developments and adapt supervisory approach as SDX integrates further with SIS. ### Fintech ecosystem, DLT progress, and regulatory measures - Scale and composition: - 483 fintech companies in Switzerland (IFZ Fintech Study 2023); sector mainly B2B and internationally oriented. - DLT-focused firms prominent; Crypto Valley accounted for 5.1 percent of European venture funding in 2023. - Regulatory milestones and instruments: - DLT Act entered into force 1 August 2021 (prudential supervision of crypto-asset custodians; definition of ledger-based securities; dedicated license for DLT-based securities trading). - FINMA guidance on taxonomy of crypto assets, stablecoins, and staking (e.g., FINMA Guidance 08/2023 “Staking”). - First DLT trading facility licensed: BX Digital on March 12, 2025. - Fintech license (introduced 2019) permits acceptance of public deposits up to CHF 100 million (or crypto assets) under constraints; minimum capital requirement CHF 300,000 or 3 percent of deposits. - Regulatory sandbox (approved 2017) allows deposit acceptance up to CHF 1 million without license. - Supervisory capacity and recommendations: - FINMA Fintech Desk staff: eight people; enquiries stabilized at ~100 per year but complexity rising; Fintech Desk resources are stretched. - Recommendation: equip FINMA with sufficient resources for fintech monitoring and supervision to keep up with sector growth and international standards (Timing: MT. Priority: H. Responsibility: FINMA). - Authorities should assess banks’ crypto asset exposures comprehensively and implement the Basel prudential standard on crypto asset exposures (effective January 1st, 2026) in a timely and faithful manner (Timing: ST. Priority: H. Responsibility: FDF, FINMA). - Prudential treatment: - Basel standard classifies exposures into Group 1 and Group 2; Group 2 carries a risk weight of 1,250 percent. - FINMA local approach decided to apply an 800 percent risk weight to on-balance-sheet exposures. - Consumer protection, enforcement, and market activity: - FINMA investigations (2020–2024): 385 investigations; 235 cases published in warning list; 12 enforcement proceedings for unlicensed business; 31 criminal charges; 42 cases remain under investigation. - As of December 2024, FINMA-regulated banks and securities firms held in custody about CHF 13.9 billion of crypto assets. - Comparative banking figures (end-of-2024): CHF 1,983.5 billion deposits; CHF 9,782.5 billion assets under management. - Turnover for indirect investments in crypto assets peaked H1 2021 at CHF 1,200 million and decreased to CHF 183 million as of December 2023. ### Open finance, AI, regtech/suptech, and crowdfunding - Open finance: - Government fosters market-driven open finance; FDF set targets in 2022 for voluntary API-based data exchange. - Achievements reported in 2024: MoU on multibanking by 40 banks; other targets (common standards, open interfaces, scalability) not yet achieved. - Recommendation: strengthen governance structure for open finance; establish formal coordination among financial, competition, cybersecurity, data and consumer protection authorities and monitor pricing/fairness (Timing: MT. Priority: L. Responsibility: FDF, SIF). - AI in financial sector: - FC mandates and timelines: November 2023 order for overview of AI regulatory approaches; February 2025 FC mandated FDJP to draft bill by end of 2026 to implement Council of Europe’s AI Convention. - FINMA expectations (2024 survey): ~half institutions use or plan to use AI; supervisory concerns include model risk, data quality, explainability, independent review. - Regtech / Suptech: - FINMA Digital Strategy 2022; 2023 Suptech deployments for summarization, transaction processing, applications support and regulatory indicators. - Crowdfunding: - 36 crowdfunding platforms by March 2024; CHF 558.7 million raised in 2023; CHF 4.2 billion raised in total since 2018. - Crowdlending 2023 total CHF 398.1 million versus banking credit to SMEs CHF 395.2 billion in 2023; crowdfunding remains a niche without systemic risk. ### Key prioritized recommendations (excerpted, preserving timing, priority, responsibility) - Part I: FMI and wCBDC — Effectiveness of oversight and supervisory framework - 1 Increase the resources dedicated to FMI supervision and increase the number of on-site reviews (¶44). Timing: I. Priority: H. Responsibility: FINMA. - 2 Expand cooperation with Spanish authorities (CNMV) on recovery and resolution planning, including testing (¶47). Timing: I. Priority: H. Responsibility: FINMA. - 3 Introduce regular discussions with FMI participants and market participants (¶46). Timing: ST. Priority: L. Responsibility: FINMA, SNB. - 4 Expedite the revision of the FinMIA to close gaps with regards to the PFMI and international best practices (esp. with respect to resolution tools) (¶45). Timing: ST. Priority: H. Responsibility: FDF, FINMA. - Part I: Select Issues in FMI risk management - 5 Ensure adherence of SXC’s new initial margin model to the PFMI and monitor its implementation (¶108). Timing: C. Priority: H. Responsibility: FINMA, SNB. - 6 Ascertain that SXC and SIS continue to improve their respective recovery plans and ensure that each FMI fully meets the requirements of the PFMI (¶109). Timing: I. Priority: H. Responsibility: FINMA. - 7 Finalize and adopt resolution plans for SXC and SIS (¶110). Timing: ST. Priority: H. Responsibility: FINMA. - Part I: SIX Digital Exchange: DLT and wCBDC - 8 Monitor SGA’s plans for SDX and adapt supervisory approach, if needed. (¶132) Timing: MT. Priority: L. Responsibility: FINMA. - 9 Expand strategic discussions / deliberations on permanent requirements for the provision of wCBDC to settle tokenized assets on third-party operated platforms. (¶133) Timing: ST. Priority: M. Responsibility: SNB. - Part II: Fintech - 10 Assess bank’s crypto assets exposures comprehensively and implement the Basel prudential standard on crypto assets exposures in a timely and faithful manner. (¶164) Timing: ST. Priority: H. Responsibility: FDF, FINMA. - 11 Equip with sufficient resources for fintech monitoring and supervision to keep up with the sector growth. (¶165) Timing: MT. Priority: H. Responsibility: FINMA. - 12 Strengthen the governance structure for open finance. (¶172) Timing: MT. Priority: L. Responsibility: FDF, SIF. - Timing legend: C: Continuous; I: Immediate (<1 year); ST: Short Term (1–2 years); MT: Medium Term (3–5 years). - Priority legend: H: High; M: Medium; L: Low. ### Selected statistics (exact figures from appendices) - SIC Daily Averages — Daily Average Number of transactions (in thousands) and Turnover (in CHF millions): - 2019: 2620  ; 158024 - 2020: 2870  ; 178214 - 2021: 3490  ; 163319 - 2022: 3720  ; 199647  - 2023: 3860  ; 227840 - 2024 (Q2): 4000 ; 227840  - SIX X-CLEAR — Equities (Volume in thousands ; Value in CHF millions) — Total (Volume in thousands ; Value in CHF millions): - 2019: 2’360.57 ; 26’157.21 - 2020: 2’708.53 ; 27’871.27 - 2021: 2’875.61 ; 30’666.31 - 2022: 3’179.518 ; 35’619.17 - 2023: 2’587.412 ; 30’698.00 - 2024 (Q2): 2’610.16 ; 38’444.14 - SIS — Securities held (Year-End) Total (Volume in thousands ; Value in CHF millions): - 2019: 687.89 ; 3 548 480.42 - 2020: 744.16 ; 3 579 072.93 - 2021: 786.18 ; 3 949 579.08 - 2022: 803.59 ; 3 361 239.59 - 2023: 854.59 ; 3 491 493.81 - 2024 (Q2): 909.27 ; 3 729 141.16 - SDX — Securities held (Year-End) Total (Volume in thousands ; Value in CHF millions): - 2020: 0.0 ; 0.0 - 2021: 0.0 ; 79.7 - 2022: 0.0 ; 451.7 - 2023: 0.0 ; 710.1 - 2024 (Q2): 0.0 ; 1’258.6 - Participation in Swiss FMIs (Number of Participants, YE 2023): - SIX SIC: Total 318 (Domestic 261; Foreign 57) - SIX x-CLEAR: Total 69 (Domestic 42; Foreign 27) - SIX SIS: Total 319 (Domestic 194; Foreign 125) - SDX: Total 12 (Domestic 11; Foreign 1) *Source: IMF — Executive Summary and chapter excerpts from Switzerland FSAP (Part I: FMIs and wCBDC; Part II: Fintech) as provided in the source PDF.* ### EXECUTIVE SUMMARY __________________________________________________________________________ 5 ### EXECUTIVE SUMMARY ### Overview of the FMI landscape and purpose of the note - The Swiss FMI landscape is efficient and reflective of the advanced nature of the country’s financial market. - Switzerland hosts three domestic, systemically important FMIs owned by a single group (SIX Group): a CCP (SIX x-clear Ltd.), a CSD (SIX SIS Ltd.), and the country’s RTGS Payment System (SIC). - Three foreign FMIs are considered systemically important by Swiss authorities: two CCPs (LCH Ltd and Eurex Clearing AG) and a foreign exchange Payment System (CLS). - A range of domestic and non-domestic FMIs, including FMIs using newer technologies such as DLT, are present on the Swiss market. - Main objective: analyze the potential for FMI-related risks to financial stability in Switzerland, assess supervision and oversight, review risk management arrangements at the three domestic systemically relevant FMIs, and provide insights into DLT-based FMIs and settlement of tokenized securities with wCBDC. ### Regulatory alignment, supervision, and authorities - The Swiss FMI regulatory regime is largely aligned with the CPMI-IOSCO Principles for Financial Market Infrastructures (PFMI). - FINMA is responsible for supervising FMIs; the SNB is responsible for oversight of systemically important FMIs. - FINMA and the SNB disclose their policies regarding FMIs and have established cooperative arrangements with each other and with authorities of other relevant jurisdictions. - FINMA and the SNB employ staff with considerable expertise and experience and the country’s regulation provides for comprehensive powers and tools. - Going forward, authorities—especially FINMA—should increase resources to ensure adequate supervision of a dynamic and expanding FMI landscape. - SIX Group’s integration of the Spanish BME Group and the outsourcing of multiple key functions to SIX Group entities may expose FMIs to additional risks. Authorities need sufficient resources to expand involvement and participation in on-site inspections to understand and assess changing processes at SIX Group and the respective FMIs. - It is important to expedite the revision of the Financial Market Infrastructure Act (FinMIA) and expand cooperation with the Spanish authority (CNMV). FINMA’s ability to progress and finalize resolution plans is contingent on FinMIA revision, as legal amendments and specifications are needed. - Close cooperation with CNMV should be ensured on recovery and resolution planning, including testing of these plans. ### FMI risk management, resilience, and recovery/resolution - The three domestic, systemically important FMIs have implemented risk management frameworks in observance of the PFMI, but further changes are envisaged. - The CCP (SXC) plans to introduce a new initial margin model; authorities should ascertain the CCP’s resilience and compliance of the model with the PFMI and related guidance. - The CCP and the CSD should continue to improve and test their respective recovery plans to ensure implementability. - To strengthen credibility of recovery plans, both FMIs should introduce scenarios including failures of other group entities. - FINMA should finalize and adopt resolution plans for SXC and SIS; legal reform (FinMIA) is needed to provide necessary resolution tools. ### DLT, wCBDC, and the SIX Digital Exchange (SDX) experience - Switzerland was among the first to enact regulation for the use of blockchain technology by FMIs. - Switzerland pioneered settling tokenized securities with wCBDC issued on a SIX Group-owned FMI platform in a real-life operational environment. - Market adoption has been slow due to: - Efficiency of existing traditional FMI landscape in Switzerland (cost and operational perspective). - Constraints regarding availability of wCBDC. - The SNB recently increased availability of wCBDC and will monitor market reception and activity. - Going forward, the SNB should establish a strategy clarifying conditions under which it could issue wCBDC on third-party operated platforms on a more permanent basis. - Monitor SGA’s plans for SDX and adapt supervisory approach if needed. ### Fintech ecosystem, progress, and remaining gaps - Switzerland hosts more than 483 fintech companies, serving mostly the business-to-business segment and focusing on international clientele. - DLT-focused companies stand out in the fintech landscape. - The Swiss Crypto Valley accounted for 5.1 percent of European venture funding in 2023. - Switzerland’s attractiveness for fintech relies on favorable business environment, macroeconomic conditions, digitalization, skilled workforce, and regulatory frameworks. - Major progress since the last FSAP: - DLT Act (entered into force 2021) introduced prudential supervision of crypto-asset custodians, defined ledger-based securities, and created a dedicated license for trading of DLT-based securities. - FINMA drafted guidance on taxonomy of crypto assets, issuance of stablecoins, and staking services. - FINMA imposed amendments to stock exchange rules to ensure quality in collateralization of crypto-Exchange Traded Products. - FINMA requires a “Crypto-assets Resolution Package” from regulated entities involved in custody and/or staking of crypto-assets. - Additional requirements set for Swiss banks and securities firms that custody crypto assets abroad. - Reviews of consumer protection framework and the fintech license are underway to ensure protection for investments offered by unregulated entities and segregation of consumers’ funds in bankruptcy. - Government fosters financial innovation through a comprehensive plan of action that includes concrete goals for open finance. - Scope for further improvements: - FINMA should be equipped with sufficient resources to keep up with financial innovation and international standards and to intensify supervision of crypto licensed activities. - Government should strengthen governance structure of open finance to contemplate interests of different stakeholders and emerging risks. ### Key recommendations (excerpted, preserving timing, priority, and responsibility) - Part I: FMI and wCBDC — Effectiveness of oversight and supervisory framework - 1 Increase the resources dedicated to FMI supervision and increase the number of on-site reviews (¶44). Timing: I. Priority: H. Responsibility: FINMA. - 2 Expand cooperation with Spanish authorities (CNMV) on recovery and resolution planning, including testing (¶47). Timing: I. Priority: H. Responsibility: FINMA. - 3 Introduce regular discussions with FMI participants and market participants (¶46). Timing: ST. Priority: L. Responsibility: FINMA, SNB. - 4 Expedite the revision of the FinMIA to close gaps with regards to the PFMI and international best practices (esp. with respect to resolution tools) (¶45). Timing: ST. Priority: H. Responsibility: FDF, FINMA. - Part I: Select Issues in FMI risk management - 5 Ensure adherence of SXC’s new initial margin model to the PFMI and monitor its implementation (¶108). Timing: C. Priority: H. Responsibility: FINMA, SNB. - 6 Ascertain that SXC and SIS continue to improve their respective recovery plans and ensure that each FMI fully meets the requirements of the PFMI (¶109). Timing: I. Priority: H. Responsibility: FINMA. - 7 Finalize and adopt resolution plans for SXC and SIS (¶110). Timing: ST. Priority: H. Responsibility: FINMA. - Part I: SIX Digital Exchange: DLT and wCBDC - 8 Monitor SGA’s plans for SDX and adapt supervisory approach, if needed. (¶132) Timing: MT. Priority: L. Responsibility: FINMA. - 9 Expand strategic discussions / deliberations on permanent requirements for the provision of wCBDC to settle tokenized assets on third-party operated platforms. (¶133) Timing: ST. Priority: M. Responsibility: SNB. - Part II: Fintech - 10 Assess bank’s crypto assets exposures comprehensively and implement the Basel prudential standard on crypto assets exposures in a timely and faithful manner. (¶164) Timing: ST. Priority: H. Responsibility: FDF, FINMA. - 11 Equip with sufficient resources for fintech monitoring and supervision to keep up with the sector growth. (¶165) Timing: MT. Priority: H. Responsibility: FINMA. - 12 Strengthen the governance structure for open finance. (¶172) Timing: MT. Priority: L. Responsibility: FDF, SIF. - Timing legend: C: Continuous; I: Immediate (<1 year); ST: Short Term (1–2 years); MT: Medium Term (3–5 years). - Priority legend: H: High; M: Medium; L: Low. *Source: IMF—Executive Summary of Switzerland FSAP (Part 1: FMIs and wCBDC; Part II: Fintech).* ### 5. The Swiss FMI landscape is mature and relies on the performance of a variety of ### 5. The Swiss FMI landscape is mature and relies on the performance of a variety of domestic and non-domestic FMIs ### Swiss FMI structure and key market participants - FMIs active in Switzerland include Central Clearing Counterparties (CCP), Central Securities Depositories (CSD), Payment Systems (PS), Trade Repositories (TR), and FMIs based on new technologies such as DLT and digital assets. - SGA (unlisted public limited company) operates: - SIX Swiss Exchange (primary exchange) - the local CCP, CSD and TR - the country’s RTGS - retail payment services, financial data services and cards services - Ownership and client concentration: - UBS holds more than a third of the shares of SGA following its acquisition of Credit Suisse and is also SGA’s dominant client. - SGA’s international expansion and new ventures: - acquisition of BME Group and Regis-TR (Luxembourg) - venture into digital assets via SDX - licensing of BX Digital, FINMA’s first DLT trading facility on March 12, 2025 ### Systemically important domestic FMIs owned/operated by SGA - Three FMIs designated as systemically important by the Swiss National Bank dominate post-trade services for securities: - SIX x-clear (SXC) - provides clearing services for securities (incl. equities and bonds) traded on SIX Swiss Exchange, the London Stock Exchange, the Oslo exchange (via its Norwegian Branch) and other major exchanges and trading venues - has interoperability arrangements with LCH Ltd and Cboe Clear - recognized as a third country CCP by ESMA - SIX SIS (SIS) - provides custody and settlement services, operates SECOM (real-time Securities Settlement System, SSS) - provides collateral management services related to repo market transactions, including SNB repo and interbank repo transactions - maintains links with multiple other CSDs, including via TARGET2-Securities (T2S) - Swiss Interbank Clearing (SIC) system - payment system operated by SIX Interbank Clearing Ltd. on behalf of the SNB; only the RTGS PS functionality is in scope for this note - interbank RTGS transactions account dominates in terms of turnover volume, while 96 percent of SIC transactions are retail payments transactions ### Other domestic FMIs and expected developments - Other domestic, non-systemically important FMIs include: - SIX Digital Exchange (SDX) (SGA-owned CSD) - SIX Trade Repository - EuroSIC RTGS system for settlement in euro (managed by Swiss Euro Clearing Bank) - EuroSIC will be discontinued at the end of 2027 due to low usage and lack of economic rationale - Number and types of FMIs are expected to grow and diversify, including FMIs based on DLT, as Switzerland strengthens competitiveness and encourages new platform technologies. ### Non-domestic FMIs relevant to Switzerland - Switzerland relies on non-domestic FMIs for access to derivatives clearing and foreign exchange settlement. Three non-domestic FMIs are systemically important: - LCH Ltd (LCH) — UK-based CCP - offers clearing services for securities and OTC derivatives, including derivatives denominated in Swiss Francs - enables Swiss banks to hedge and manage risks and capital requirements under Basel III - interoperable with SXC for securities and connected to SIS (CSD for cleared securities) - Eurex Clearing AG (Eurex) — Germany-based EU CCP - provides access to clearing services for securities and derivatives, including derivatives based on Swiss underlying assets - maintains a connection with SIS; some Swiss banks prefer SIS as CSD when using Eurex - Continuous Linked Settlement (CLS) — US-based FMI - operates an international payment system settling foreign exchange transactions - owned by 79 direct members (mostly banks), including three large Swiss institutions - key in mitigating settlement and liquidity risks for settlement members and their clients ### Regulatory and supervisory framework (legislation and authorities) - Principal legal instruments in force since January 2016: - FinMI Act (Fin MIA) and Fin MI Ordinance (Fin MIO) - NB Act (NBA) and NB Ordinance (NBO) - two Explanatory Notes - framework implements adoption of the PFMI in Switzerland - Roles and responsibilities: - FINMA (National Supervisory Authority) - authority to supervise and authorize FMIs, except PSs and FMIs operated by or on behalf of the SNB - responsible for consolidated supervision of FMIs that are part of a financial group (e.g., SGA) - resolution authority for FMIs - SNB (Swiss Central Bank) - oversight responsibilities for systemically important CCPs, CSDs and PSs - designates FMIs and business processes as systemically important in consultation with FINMA - can waive certain NBO special requirements under conditions (including equivalent home supervision); has done so for all systemically important, non-domestic FMIs - Recognition and oversight of non-domestic FMIs: - Non-domestic CCPs and TRs entering arrangements with Swiss counterparties or accepting derivatives trade reports require recognition from FINMA but are not subject to FINMA’s ongoing supervision - Oversight of systemically important FMIs (domestic and non-domestic) is carried out by SNB - International regulatory alignment: - Swiss FMIs are significantly impacted by EU and UK regulatory frameworks; continued access to EU/UK clients requires cooperation agreements and regulatory equivalence - SGA’s acquisitions (e.g., BME, Regis-TR) increase direct relevance of EU regulatory framework ### Oversight and supervisory practices, cooperation, and adequacy - Identification and disclosure: - Criteria to identify FMIs subject to regulation, supervision and oversight are defined in legislation and publicly disclosed - FINMA and SNB publicly disclose FMIs subject to their supervision/oversight - Risk-based approach: - FINMA and SNB adopt a risk-based approach; SXC and SIS receive most intense supervision, including annual assessments against Fin MIA and NBO requirements - Authorities communicate expectations and priorities in writing for the upcoming year - Cooperation between authorities: - FINMA and SNB have an efficient bilateral MoU-like cooperative framework, including information sharing based on Art. 21 NBA, Art. 50 NBA (SNB) and Art. 39 FINMASA - 2021 establishment of “Framework for FMI stress and crisis situations” - supervisory responsibilities differ: - FINMA focuses on governance, outsourcing, capital management, recovery and resolution planning, and supervises at group level (SGA); FINMA’s yearly Assessment Letter is addressed to SGA - SNB focuses on financial risk management, IT systems and business continuity; SNB’s Annual Opinion Letter is sent directly to single FMIs - FINMA engages in supervisory colleges and MoUs with foreign authorities (e.g., CNMV) following SGA’s BME acquisition - Regulatory updates and gaps: - Comprehensive review of Swiss FMI framework produced proposed amendments that will come into force in 2028–2029 - Identified gaps notably pertain to recovery and resolution planning for FMIs and are set to persist in the foreseeable future - Switzerland enacted the DLT blanket Act effective 1 August 2021, introducing a license for DLT trading facilities (DLT trading facility: new type of FMI for DLT securities open to companies and natural persons) - Switzerland preceded the EU’s DLT pilot regime by more than two years ### Powers, information access, and supervisory resources - Legal powers and information access: - Fin MIA and NBA grant authorities powers to obtain timely, relevant and comprehensive information without legal scope constraints - Sanctions, including criminal provisions and fines, are possible for refusal or false/incomplete information - FINMA and SNB may conduct on-site audits or appoint third parties to perform them - Engagement with FMIs and market participants: - Authorities have regular meetings with SGA management and FMI technical experts; they require FMIs to provide data, policies, procedures and contractual frameworks - Authorities have yet to establish regular meetings with FMI participants and clients — identified as important for comprehensive understanding given EU post-trade consolidation and SGA’s DLT experiments - Enforcement powers: - FINMA can appoint investigators, revoke licenses, or limit business activities - SNB can sanction a systemically important FMI in cooperation with FINMA, though SNB’s powers are more limited - Resource constraints: - FINMA increased FTE by one since the last FSAP, but resources for FMI supervision remain limited - Market Infrastructure and Derivatives Section total staffing: 8.8 FTE - within that, 3.8 FTE allocated to the Supervision of Market Infrastructures (SMI) Group and 5 FTE in the Legal Market Infrastructures Group - within SMI, a single FTE is allocated to the supervision of the CCP, the CSDs (SIS and SDX), and the TR altogether (with the support of the Team Lead) - less than a single FTE is thus allocated to the supervision of each domestic FMI; prolonged unavailability of the respective expert would leave no dedicated expert within SMI for supervision of the country’s FMIs *Source: IMF staff summary of chapter 5 from the provided PDF content.* ### 28. FINMA’s SMI Group is supported by various horizontal functions within FINMA. ### FINMA’s SMI Group is supported by various horizontal functions within FINMA. ### Support and resourcing of FINMA and SNB for FMI supervision and oversight - FINMA’s Recovery and Resolution Department is responsible for organizing and supporting FINMA’s participation in the various CMGs and is responsible for recovery and resolution planning, wherefore it has allocated one FTE to this endeavor. - Two horizontal functions within FINMA (the Quantitative Risk Management and the Operational, Cyber and Risk teams) support the SMI in their assessment of FMI model changes and cyber and IT risk supervision. - FINMA outsources the yearly on-site audit of FMIs to an external party and conducts a limited amount of brief on-site reviews at Group level (2–3 per year). - The longstanding outsourcing practice limits the build-up of expertise at FINMA and may undermine its ability to fulfil its supervisory responsibilities. - The SNB’s oversight unit for systemically important FMIs consists of 10 FTE, with approximately 2 FTE each allocated for the oversight of SIS and SXC. - Other SNB units support oversight work (e.g., Legal Services division; Money Market and Forex division regarding CMGs and liquidity facilities). - The SNB oversight team does not participate in on-site audits to avoid overstretching resources. ### Disclosure of policies and public information - Both authorities have clearly established objectives and roles defined in publicly available regulatory documents (e.g., FinMIA, NBA and FINMASA). - FINMA’s objectives with respect to FMIs include protecting creditors, investors, and insured persons, and ensuring the proper functioning of the financial market. - The SNB’s mandate regarding FMI oversight focuses on the stability of the financial system. - Tasks and responsibilities of various units are outlined in internal documents (i.e., not publicly available). - FINMA and the SNB publicly disclose relevant information and inform on their activities, approaches and policies with respect to FMI supervision and oversight (including high-level discussion in annual reports and more detailed intentions and work plans shared with FMIs). ### Application of the Principles for Financial Market Infrastructures (PFMI) and legislative revision - Switzerland has adopted the PFMI via the FinMIA/FinMIO and the revisions to the NBO, enabling FINMA and the SNB to oversee and supervise the FMIs in Switzerland; a Level 2 assessment by CPMI-IOSCO in 2018 confirmed this, although a range of gaps were observed. - A holistic revision process of the FinMIA is set to address identified gaps, although the proposed amendments are unlikely to be introduced before 2028/2029. - The revision process faces potential delays and uncertainty due to considerable opposition of the Swiss financial industry to the current proposal; the industry’s opposition pertains to proposed changes regarding the rules for exchanges (formally classified as FMIs in Switzerland), not FMI-specific aspects. - The authorities apply PFMI requirements to all domestic payment systems, CSDs/SSSs and CCPs designated as systemically important via implementation of respective legislative texts (including SIC operated by SIX Interbank Clearing Ltd. on behalf of the SNB). - Supervision/oversight includes FMIs’ cross border services, as long as the FMI is domiciled in Switzerland. - In the upcoming legislative revision, FINMA will likely obtain the ability to comprehensively apply the PFMI to FMIs domiciled in Switzerland but deemed systemically important solely in other jurisdictions. - The SNB is both operator and overseer of the SIC payment system; potential conflicts of interest are addressed by allocating oversight and operational responsibilities to separate organizational units in different departments reporting to different Governing Board members. ### Cooperation with other authorities and crisis frameworks - FINMA and the SNB have cooperation arrangements enshrined in legislation and formalized by an exchange of letters clarifying responsibilities; cooperation includes sharing information and coordinated/joint activities and information sharing practices. - A crisis management framework (“Framework for FMI stress- and crisis situations”) was finalized by FINMA and the SNB in June 2021; it governs collaboration, involvement of the Financial Crisis Committee, and exchange of information across all stages of stress and crisis development and is tested annually via annual drills. - Multilateral and bilateral cooperation arrangements with foreign authorities exist for Swiss and foreign FMIs deemed systemically important in Switzerland; Swiss legislation permits information sharing subject to conditions including MoUs and written agreements. - Cooperative agreements are prerequisites for the Swiss authorities to ascertain adherence to national laws and the PFMI when discharging non-domestic FMIs from certain SNB special requirements. - Cooperative arrangements extend to Crisis Management Groups (CMGs) to facilitate coordinated responses in times of stress. - A dedicated MoU between FINMA and CNMV enables wide-ranging information exchanges, coordination of supervisory activities, and organization of biannual common colleges with CNMV. - Cooperation between FINMA and CNMV has yet to be expanded to include common work streams on recovery plans and dedicated testing arrangements at Group level; development of common scenarios, coordinated responses and testing is key given SGA’s presence in various jurisdictions and integration intentions. ### Recommendations (key supervisory and policy actions) - FINMA should increase resources available to its FMI supervision team: the SMI Group has less than 1 FTE dedicated to supervision of the country’s CCP and CSD; reliance on support from other functions and cooperation with SNB leaves the team vulnerable if the main expert becomes unavailable and limits participation in on-site inspections. - Swiss authorities shall expedite adoption of the FinMIO/FinMIA revision to close gaps with the PFMI and international best practices, especially regarding recovery and resolution of FMIs to facilitate improvement and finalization of resolution plans by FINMA; it is imperative to ensure the revision is not delayed due to industry opposition to elements unrelated to FMIs, possibly by decoupling FMI topics. - Authorities should introduce regular discussions with FMI participants and broader market participants to ensure changes (including in the European post trading landscape and experimentation with new technologies and FMI types) are inclusive, strengthen financial stability, and avoid an a la carte regime for large dominant banks. - FINMA shall extend cooperation with CNMV regarding supervision of SGA’s FMIs to strengthen recovery and resolution planning arrangements, including testing, and develop and test group-wide scenarios given progressing integration and outsourcing arrangements. ### Selected FMI risk management topics at SXC, SIS, and SIC — Group-level arrangements - SXC, SIS and SIC follow a hybrid approach: fundamental risk management guiderails and activities are determined and performed at group level, while other responsibilities lie at the FMI level. - All three FMIs adhere to SGA’s Risk Policy (SRP), adopted at group level and approved by SGA’s Board of Directors and FINMA. - FMIs’ Boards of Directors bear ultimate legal responsibility for overall risk management and day-to-day implementation, including calibrated risk appetite frameworks; each FMI has a dedicated risk appetite framework. - Governance: streamlined structures with a Board of Directors (BoD) and a Management Board (MB); adoption of SGA’s “three lines of defense” model. - First line: senior executives of the FMI (accountable for specific business risks). - Second line: entirely outsourced to a group-wide central function with functional risk management teams headed by SGA’s CRO; SGA’s Head of the Financial and Quantitative Risk Team also acts as CRO for both SIS and SXC. - Third line: FMI’s BoD and internal and external auditors. - Since the last FSAP, changes strengthen independence of FMIs’ governance: BoDs of SXC and SIS comprise a majority independent from group management; the Chairman of the FMIs’ BoD also sits on the group BoD, chairs SGA’s Risk Committee, and is independent from group management. - SGA group competency rules establish that in case of contradicting decisions by the Group and the FMI Board, the FMI Board's decision prevails. - SIC arrangements differ due to SNB involvement: SNB has a seat on the Board of SIX Interbank Clearing Ltd and significant system manager responsibilities; SNB’s risk management mirrors SGA’s framework with SNB line managers as first line, a separate SNB unit for oversight as second line, and SNB internal audit as third line. - Risk tools and techniques are harmonized at group level: all three FMIs employ SGA’s Enterprise Risk Management (ERM) tool and rely on a group-wide Internal Control System (ICS); with respect to SIC, the SNB applies an ICS supplemented by a directive on operational risks management. - Certain functions (Business Continuity Management and compliance) are entirely outsourced and managed at SGA-level; all three FMIs rely on SIX Group Services for controlling, HR, compliance, IT operations, security and legal services. - FMIs maintain and update comprehensive risk inventories, aggregate risks across FMI and higher group levels, and review risk policies and frameworks at least on a yearly basis. - Mitigants for continuity: SIX Group Services keeps additional capital and liquidity reserves to ensure continued provision of services in wider stress scenarios; the Head of SGA’s Financial and Quantitative Risk Management Team also being CRO of both SXC and SIS provides additional assurances for continuity in a crisis. ### SXC: key features and context - SXC is a CCP providing clearing services for equity market instruments and to a lesser extent bonds traded on 26 European trading venues. - SXC is a wholly owned subsidiary of SIX Securities Services AG and part of SIX Exchange Group AG, fully owned by SGA. - SXC interposes itself between trading partners, allowing multilateral netting and portfolio offsetting. - SXC has been designated as systemically important by the SNB. - SXC operates in a highly competitive market as the European post-trading landscape consolidates and is under pressure to grow and provide an economically attractive clearing service to its 62 current clearing members. - The CCP’s risk management arrangements are of primordial importance given its systemic designation and competitive pressures. *Source: IMF country report excerpt.* ### 58. SIX x-clear performs its own operative risk management as a core function and is ### SIX x-clear: Operative and Risk Management Framework ### Core FMI-level risks and regulatory orientation - SIX x-clear (SXC) manages credit, market, liquidity, operational, custody and settlement risks as key CCP risks as a core function. - SXC adheres to the Swiss regulatory framework and aims to comply with the EU framework, which is more prescriptive (for example, anti-procyclicality features of initial margin models). ### Credit and market risk management: margins and stress tests - Two main inputs determine prefunded resources: margins and stress tests. - Margin framework: - Encompasses both variation and initial margin models. - Margin requirements are calculated in real time during the clearing day and adjusted where applicable. - Members must post additional collateral within 1 hour if collateral values fall below requirements. - Stress testing framework: - Includes default, non-default and liquidity stress scenarios. - Scenarios are a key input to determine the required size of the CCP’s default fund and liquidity arrangements. ### Initial margin models: SECOM, SCP, and the future SREC - Current operating environment: - SXC operates two separate clearing systems, SECOM and SIX Clearing Platform (SCP), applicable depending on trading/clearing venue. - Clearing members connecting via the Swiss Stock Exchange use the SECOM model; clearing members connecting to SXC’s Norwegian Branch collateralize according to SCP. - In 2025 SXC plans to introduce a single new initial margin model based in SECOM (SREC). - SECOM (main current initial margin model): - Based on a multilayered, complex approach yielding conservative collateral requirements. - Step 1: 99.7 percent Value-at-Risk (VaR) for respective instruments, using a liquidation period that differs across asset classes. - Step 2: VaR results bucketed into 8 different risk buckets (per asset class) to derive a base margin. - Step 3: Various add-ons and off-sets included for risks not sufficiently addressed by the base methodology. - Supplement: margin validation and calibration methodology deriving daily initial margin requirements via a Monte Carlo-based VaR model; SIX x-clear applies the more conservative result from validation. - SCP (second initial margin model): - Based on a Monte Carlo VaR approach to generate profit and loss (PnL) scenarios for portfolio margining using historical data. - Parametric assumptions for return simulations checked daily against historical data. - Margin is calculated at a 99 percent confidence level using a close-out period of two days for all underlying equity instruments. - SREC (future unified risk model): - Will consist of a Hybrid VaR risk model: 75 percent Monte Carlo VaR component (same as in SCP) and 25 percent Stress VaR component. - Stress VaR will be based on a window of historical observations during which market stress was pronounced (periods of market stress identified via “dual lambda” approach). - Introduction contingent on supervisory approval. - Likely to result in lower margin requirements. - Planned to serve as margin model for cash equities across the group, including the Nordics and, in a second step, BME Clearing in Spain. - The CCP has yet to obtain a track record of successfully implementing a new initial margin model; supervisory scrutiny on model performance and suitability for specific products and markets will be key. ### Default fund and stress testing - Default fund size is defined by the CCP’s stress tests. - Participant contributions based on individual risk contribution, calculated using: - membership category, - the median initial margin over a set period, - the credit rating of the respective member. - Daily stress tests assume the default of the two financial groups creating the largest aggregate credit exposure to SIX x-clear and consist of historical and hypothetical scenarios. - Stress test breaches of set thresholds may result in recalibration of the default fund. - Stress test assumptions and parameters are revised on an ad hoc basis after large market movements. - The risk management model of SIX x-clear is assessed and validated annually by an external, independent entity. ### Default management and porting - Default Management Procedures (DMP) exist, with overall responsibility allocated to the FMI’s senior management. - As the CCP clears solely exchange-traded securities, no auctions are foreseen; the CCP liquidates defaulter’s positions via brokers responsible for operationalizing the close-out. - Annual tests of DMP include brokers but do not include any clearing participants. - Porting is theoretically facilitated but not tested, given the standard option to close out positions via designated brokers. ### Liquidity risk management - Comprehensive liquidity risk management program with a dedicated liquidity risk module enabling dedicated liquidity stress tests. - Stressed liquidity positions consider exposure to correspondent banks, settlement agents, and clearing members; liquidity planning tool tracks projected/planned cash flows up to T+4. - Liquidity is monitored daily against pre-defined risk appetite and risk tolerance limits. - Main liquidity providers and arrangements: - SIS is the main liquidity provider (in line with SGA’s preference for intra-group dealings). - SXC has direct access to the SNB’s central bank facility and can pledge eligible collateral to receive liquidity. - Committed credit lines with custodian banks facilitate day-to-day business. - Collateral management policies: - Only accepts collateral in the form of cash in highly liquid currencies and securities included in the list of collateral eligible for SNB repos. - To reduce wrong-way risk, commercial bank guarantees and any security of which the issuer is a bank or other credit institution are not accepted as collateral. - Issue-specific maximum concentration limits ensure diversification of collateral pool. - Daily validated haircuts based on a VaR model and historical and hypothetical stress test scenarios. ### Interoperability, custody and operational resilience - Interoperability with LCH and CBOE: - SXC applies the same tools and methodologies to manage risks from interoperable CCPs as it uses for clearing members. - A dedicated margin and collateralization process, including specific add-ons, is agreed between the Co-CCPs; margin requirements are exchanged throughout the day and collateral is placed at Clearstream Banking Luxembourg (CBL). - SXC conducts credit risk assessments and regular due diligence reviews of interoperating Co-CCPs. - Asset custody and outsourcing: - Majority of CCP assets kept at SIS or the SNB; smaller part held at highly rated financial institutions and secured reverse repo investments. - Main parts of custody and asset management activities outsourced to other legal entities within SGA under SLAs with qualitative and quantitative performance targets. - SIS appointed as settlement agent; SXC relies on CSD’s selection criteria and choice of local correspondent banks. - Operational risk and business continuity: - Comprehensive operational risk framework, regularly reviewed. - Systems fully automated with guaranteed recovery times in case of a site disaster of less than two hours (according to its Business Impact Analysis (BIA)). - Business continuity management (BCM) integrated into SGA’s BCM and SGA-wide emergency/crisis management organization. - SXC is represented in national working groups and associations (including the national interbank alarm and crisis association). - Engagement and transparency: - Continuous dialogue with clearing members via Risk Committee and Member Advisory Committee. - Risk Committee advises SXC on key risk management topics and includes both direct and indirect members. - Member Advisory Committee provides proactive information and receives feedback from clearing members. - SXC provides a margin simulation tool for clearing members to calculate portfolio margin requirements. - Participation in industry exercises: - SXC is not subject to Supervisory Stress Tests (e.g. ESMA ST) and has not participated in industry initiatives to reveal potential risk commonalities and best practices. - For 2025 SXC plans to take part in the global fire drill exercise organized by CCP Global and international regulators. --- ### SIS: Key risk management features (CSD and global custodian functions) - Role and systemic importance: - SIS acts as a CSD and global custodian covering a broad range of markets including Swiss financial market. - Provides custody, settlement and issuer services, as well as asset and tax services. - SIS and SECOM (the Securities Settlement System operated by SIS) are designated as systemically important by the SNB. - SIS is central to Swiss repo market settlement processes and to implementation of the SNB’s monetary policy operations. - SIS plays a key role in the country’s preparations for shortening the settlement cycle from T+2 to T+1 in coordination with other European jurisdictions. - Credit, settlement and FX risk tools: - Credit risk framework focuses on short-term financing services (via credit lines) and CSD treasury/investment activities. - As a CSD settling under Delivery-versus-Payment (DvP), exposures to credit risk are limited; SIS settles on a gross basis and uses central bank money via link to RTGS (SIC) where possible. - Securities are blocked on deliverer’s account and only transferred once cash settlement is confirmed. - Credit limits and conservative collateral requirements based on validated methodologies manage risks from credit lines; any short-term credit is fully collateralized by cash or liquid securities. - SIS uses the same VaR/Monte Carlo simulations-based methodology as SXC to derive collateral haircuts; haircuts validated daily. - Collateral of FMI participants is directly held at the CSD. - Liquidity provision and default tools: - SIS is liquidity provider for SXC, providing CCP with a covered multi-currency credit line and grants a broker lien to SXC as an additional emergency liquidity tool in case of a clearing member default (broker lien secured with equities received from surviving Clearing Members). - SIS has established DMPs, segregation in bookkeeping, multiple participant accounts for inhouse segregation, and clearly distributed responsibilities and procedural steps. - SIS has dealt successfully with bankruptcy/insolvency cases of participants but does not actively test default procedures with participants and other stakeholders. - Treasury, investment and FX risk management: - SIS manages counterparty credit and FX risks from overnight money market placements, repo and foreign exchange transactions. - Investment policy conservative: only investments via reverse repos in securities central-bank-eligible (part of SNB collateral basket). - Risk mitigation via high minimum credit rating requirements and nominal exposure limits. - Liquidity risk measurement and resources: - Liquidity risk measurement and planning performed via SECOM and a designated liquidity module; module considers positions at sub-custodians and correspondent banks and cash/securities collateral. - SIS applies conservative haircuts to account for liquidity outflows in stress scenarios; risk monitoring and stress testing occur daily. - Scenarios include default of the participant or participant group (Cover-1) causing largest payment obligation for SIS, extreme market conditions, and default of major liquidity providers in several currencies. - Main liquidity resources: settlement liquidity received from participants, collateral pledged to cover multi-currency secured cash credit lines, and equity capital. - Liquidity positions held at SNB or at commercial banks with very high credit rating; excess liquidity invested only in short-term reverse repos. - Prearranged and reliable funding arrangements in place; SGA committed to provide additional resources in case of a liquidity shortfall. - Operational resilience and contingency: - Comprehensive operational risk framework embedded into SGA-wide operational risk response. - BCM and IT Service Continuity Management are Group-wide frameworks; SIS included in SGA’s Business Continuity Plan. - Core systems fully automated with guaranteed recovery times of less than two hours per SGA’s Business Impact Analysis. - Redundant processing systems and ready contingency site; full workload capacity covered at both sites and all data mirrored in real time on a 24-hour, 7 days a week basis. - Operational problems from counterparty mistakes are addressed via access criteria, participant guides, testing possibilities, and a failed settlement regime to incentivize settlement ratios. *Source: SIX x-clear and SIS risk management features as described in the provided chapter.* ### 86. Wherever possible, SIS uses the services of other affiliated companies of SIX. SIS ### Risk Management, Recovery, and Innovation: SIS, SIC, SXC, and SDX (excerpts) ### SIS: Outsourcing, Custodian Relationships, and Participant Engagement - Wherever possible, SIS uses the services of other affiliated companies of SIX. SIS outsources the operation and maintenance of its data center to SIX Group Services. - Outsourcing arrangements are governed by SLAs in compliance with regulations. - SIS manages risks from the various SGA services it depends on via a Master Intercompany Agreement that includes qualitative and quantitative performance targets (e.g., through KPIs such as FTE per service, IT-service availability) which are monitored by the FMI. - SIS applies conservative selection criteria and arrangements when establishing a relationship with another FMI or local custodian. - Losses from the default of a sub-custodian are born by the participant and not the CSD. - SIS monitors risks from its custodians on a regular basis and conducts due diligence; these processes apply notably to its custodian network as well as other CSDs, and participants. - SIS provides forums to its participants at three decision levels to ensure a competitive service and alignment with its participants: - strategic (via the Swiss SPTC), operational (via “User Groups”), and technical (via Technical working groups); - these forums allow mutual exchanges and facilitate feedback channels. - The CSD is represented in national working groups and associations, ensuring its readiness in emergency and crisis situations. ### SIC: Key Risk Management Features and Operational Resilience - SIC is the central electronic Swiss payment system operated by SIC Ltd on behalf of SNB; SIC Ltd is a subsidiary of SGA. - SIC processes both large-value payments and retail payments in Swiss francs; the FSAP scope extends only to the RTGS part of SIC. - SIC’s RTGS plays a key role in the implementation of the SNB's monetary policy and has been found to be systemically important by the SNB. - SIC Ltd runs a comprehensive risk management operation and reports regularly to the SNB, in accordance with Article 36, NBO. SIC Ltd’s risk management operation is reviewed and updated annually by its Executive Committee and approved by its BoD. - Credit and liquidity exposure: - SIC is not exposed to material credit and liquidity risks as it does not directly extend credit lines to its participants. - SIC Ltd and the SNB have established procedures for managing the default of one or more SIC participants. - The SNB provides intraday and liquidity shortage financing facilities against collateral, thus assuming risks in this respect. - SIC only executes payments if sufficient cover is available; if not, the payment is delayed (RTGS) or cancelled (IP). - Liquidity access for participants: - Participants in the RTGS service can access different sources of liquidity, including interest-free intraday liquidity via the SNB’s intraday facility (must be repaid by the end of the same clearing day) and the SNB’s liquidity shortage financing facility; both facilities are offered only against collateral. - Access rules and exceptions: - The SNB defines access rules to the SIC system and decides on the suspension or exclusion of a participant. - As a general rule, SIC participants need to have a sight deposit account at the SNB to have a settlement account in SIC. - Rare deviation: SIC participation without an own sight deposit account is possible via third-party system operators; there are currently six such operators, including SIS/SECOM. - Settlement efficiency and gridlock mitigation: - Service rules require participants to split payments exceeding CHF 100 million into smaller tranches, wherever possible. - The settlement algorithm includes a mechanism to resolve gridlocks. - Payments are generally settled in the order submitted; participants can assign a priority to manage settlement sequence. - If cover is insufficient, payments remain in a wait file for a limited time; payments remaining in the wait file at the end of the clearing day are deleted and must be resubmitted by the remitting party; the designated recipient of unsettled payments may charge the remitting party a penalty fee. - Business continuity and testing: - SIC Ltd and the SNB have multi-layer backup and recovery processes and a ‘two data centers’ strategy, including a second data center in cold standby. - Batch-processing—termed “mini-SIC”—can be activated should internet access fail. - Participants can choose between the proprietary Messaging Gateway or SWIFT; standard for payment messages is ISO 20022. - Backup submission/receipt of RTGS transactions via a backup data carrier is possible; SNB can directly access the SIC system and act on behalf of the SIC participant as system manager. - Activation of the backup center and batch processing are tested annually; batch processing tests include SIC participants. - SIC Ltd tests the functionality of the technical processes at least once a year; SIC Ltd analyses annually the effect of an outage of their payment services for the Swiss financial system and submits it to the BoD. - System-critical participant requirements: - The SNB defines system-critical participants and third-party systems based on qualitative and quantitative criteria. - Special requirements include the mandatory ability to resume critical business processes in connection with the SIC system within four hours in the event of a disruption, and other operational and organizational requirements (e.g., participating in SIC’s emergency task force). ### Recovery and Resolution Planning: SXC, SIS, and SIC - Recovery plans for SXC and SIS: - In line with applicable regulations (FinMIA and FinMIO), the CCP and the CSD each developed a recovery plan to ensure survival and provision of critical processes and services in a recovery scenario. - Recovery plans are updated by the FMIs and assessed and approved by FINMA on a yearly basis. - SXC and SIS perform an annual risk analysis, define threshold values for recovery indicators and set out recovery objectives for necessary business processes. - Recovery plans assess various stress scenarios beyond BAU risk management and aim at strengthening the FMI’s capital and liquidity position. - The parent company SIX Securities Services has been endowed with a capital of CHF 300 million which becomes available during a recovery scenario. - FINMA deemed the recovery plans credible and approved them, while tasking the FMIs to continue improvements, notably integrating potential risks from interdependence between the two FMIs and demonstrating adequacy of severity of recovery scenarios. - Neither FMI tests their recovery plans or the effectiveness of recovery options; they conduct a yearly default management test that does not test recovery-plan arrangements and assumptions. - Recovery plans did not include a group-specific scenario or a failure/stress at another SGA FMI; given the dependencies and outsourcing within SGA, such scenarios were identified as important. - Recovery planning for SIC: - The SNB tasked SIC with developing a recovery plan, going beyond PFMI standards; SIC Ltd reviews and updates its recovery plan on a biannual basis and may update on a need-basis. - The SNB assesses the plan after each review cycle and submits expectations and areas for improvements in writing. - The plan includes a detailed self-assessment by SIC of recovery tools against CPMI-IOSCO guidance criteria, an analysis of impact, feasibility and time to implementation, illustrations of tool application in various stress scenarios, and an assessment of their effectiveness. - Where necessary, SIC has implemented preparatory measures to facilitate successful usage of recovery options. - The SNB as system manager is responsible for crisis management across the Swiss financial center within the IAKO; IAKO functionality is regularly tested via dedicated exercises. - Resolution planning: - The Swiss authorities have yet to finalize resolution plans for SXC and SIS; the process is contingent on the regulatory review of the FinMIA and is unlikely to be finalized before 2028-2029. - FINMA has developed a resolution scenario for SXC and SIS combining scenarios used in the FMIs’ recovery plans. - For SIC, no resolution plan is foreseen in line with the PFMI, as SIC Ltd cannot decide to wind down the RTGS without the SNB’s consent; the service contract includes an agreed notice period of 36 months. - The SNB requested SIC Ltd to develop a withdrawal plan describing the transfer process of the RTGS system either to the SNB itself or a new contractor; the SNB reviews the withdrawal plan after every update. ### Key Recommendations - Ensure comprehensive adherence of SXC’s new initial margin model to the PFMI and closely monitor its implementation: - The CCP has yet to establish a positive track record in introducing a new margin model applicable across its trading venues. - The new model is forecast to result in decreased collateral requirements for clearing members; authorities should ascertain the model is risk sensitive and includes a rigorous approach to managing and assessing anti-procyclicality. - Guidance referenced: BCBS-CPMI-IOSCO Final report on the transparency and responsiveness of initial margin in centrally cleared markets. - Require SXC and SIS to improve recovery plans and ensure full PFMI compliance: - Both FMIs should test and review their recovery plans to ensure effective implementation. - SXC and SIS should carry out periodic simulation and scenario exercises. - Recovery plans should introduce scenarios that include failures of other entities within SGA and test the impact on the respective FMI to assess intra-group arrangements, outsourced functions and shared resources (including central risk management and the FMI’s CRO). - Expedite development and approval of resolution plans for SXC and SIS: - FINMA defined information needed from FMIs to draft a resolution plan in 2024; drafting resolution plans will require significant resources and should be expedited. - For SXC, the preferred resolution strategy and tool set have been defined and discussed with the CMG; for SIS, similar progress has yet to be achieved. ### SDX (SIX Digital Exchange): DLT, Tokenization, and Market Integration (Case Study) - Overview and licenses: - SIX Group AG launched SIX Digital Exchange (SDX) in 2019; SDX operates a DLT-based securities settlement platform and, until June 2025, a trading platform. - SDX was granted two separate licenses as a CSD and exchange in September 2021. - In June 2025, SDX discontinued its digital asset trading services and consolidated them into the SIX Swiss Exchange. - SDX plans to voluntarily return its exchange license in 2025 to consolidate its trading services into the SIX Swiss Exchange. - Services and access: - SDX offers issuance, settlement, servicing, and custody of tokenized securities, including full automation of post trade servicing and asset servicing using smart contracts. - SDX’s access policies require sufficient expertise and technical capabilities; membership is restricted to banks, central banks, securities firms and FMIs, thus not encompassing private persons. - As of end 2024, its membership was largely composed of Swiss banks. - Participants are required to have a CHF account at SIC or a correspondent institution which does so. - SDX did not obtain a license as DLT trading facility and therefore operates with “traditional” exchange and CSD licenses, providing intermediated access via its members; members may have one or more accounts on the platform to store digital assets and/or digital money. - Settlement methodology and tokenization specifics: - SDX currently does not generally settle in central bank money, relying instead on its own private token. - SDX issues tokenized Swiss francs backed 1 to 1 with reserves at its account at the SNB; these tokens can then be exchanged for tokenized securities. - SDX uses R3 Corda enterprise DLT and verifies that sufficient assets/funds are available before settlement occurs. - SDX currently hosts and controls most key functions and capabilities, including the technical access portal and maintenance of the DLT nodes; its DLT platform is categorized as a private permissioned peer-to-peer network with hierarchical access to the ledger. *Excerpted and paraphrased from the provided IMF chapter/section content.* ### 115. The oversight arrangements for SDX are identical to that of other FMIs domiciled in ### The oversight arrangements for SDX ### Oversight and supervision - The oversight arrangements for SDX are identical to that of other FMIs domiciled in Switzerland. - FINMA is responsible for its prudential supervision. - No oversight of SDX is exercised by the SNB, as it is not considered to be of systemic importance. This decision was taken by SNB in consultation with FINMA and based on the limited number of members and the limited market activity at SDX. - The supervisory approach for SDX adopted by FINMA is identical to the one adopted for SIS (including foreseen activities and powers), although the intensity of the supervision is reduced in light of the reduced relevance of the FMI. ### SDX activity, structure, and business model - SDX is seen as nascent business within the wider SGA in light of the low activity on its CSD and trading platforms. - As of April 2025: - the CSD had 12 participants, - the now discontinued exchange had 3 participants. - Total digital bonds issuances on SDX amount to ca. CHF 1.5 billion. - SDX closed its trading platform in June 2025 and relies on its established bridge with SIS and the Swiss Stock Exchange to facilitate secondary market transactions for securities originally issued on SDX. - SDX plans to integrate further with SIS, develop synergies and mutually beneficial products by leveraging its DLT technologies (e.g., focusing on automatizing corporate actions via smart contract use cases). - Possible account types include proprietary, omnibus and segregated accounts. (As for regular CSDs.) ### Settlement, private tokens, and wCBDC - A settlement arrangement using SDX’s own private token is described as suboptimal because: - it results in credit risks for investors and participants, - it thus results in a balance sheet charge for holding this token, - unlike central bank money, a private token is not bankruptcy-remote but constitutes a claim on its issuer (in this case SDX). - To facilitate scaling of the technology, wCBDC would constitute a possible option to alleviate the issue. - Project Helvetia (multi-phased, common project involving SIX Group, SDX, SNB, and a select group of banks and initially the BIS Innovation Hub Swiss Centre) explores settlement of tokenized assets in central bank money via SDX’s DLT-based platform. - Phase I (2020): Tested technical and legal feasibility; two PoCs: - issuing wCBDC directly on the platform and using it to settle transactions, - building a link between SDX and SIC to settle transactions. - Both PoCs were found to be feasible, both from a technical and legal perspective. - Phase II (2021): Expanded Phase I; integrated wCBDC into core systems of the central bank and commercial banks and ran end-to-end test transactions (using test environments of production systems). Phase II included monetary policy considerations and investigated various channels of issuing wCBDC and facilitating cross-border settlement with wCBDC on SDX. - Helvetia Phase III (running since December 2023; renamed Helvetia pilot in mid-2024 and set to run at least until 2027): moved from test environments into a production environment where the SNB is making wholesale CBDC available for the settlement of commercial tokenized bond transactions. - Project Helvetia was expanded in June 2025 to include settlement of tokenized assets with traditional central bank money (RTGS link) via BX Digital connecting to SIC. - The wCBDC used in the Helvetia pilot: - constitutes a digital Swiss franc (CHF) exclusively issued to participating financial institutions via the dedicated DLT-based SDX platform, - is economically and legally an alternative but equivalent representation of sight deposits held at the SNB, - tokenization and detokenization of CHF is triggered by participating banks through SIC (RTGS) using a standardized, automated process (via established ISO messages). - SDX developed dedicated functionalities allowing SNB to retain control regarding issuance, access and redemption of wCBDC on SDX’s platform, including: - SDX hosts all nodes on its platforms (including the central bank node and commercial bank nodes), - SDX controls the notary node and an observer node which collects all intraday transaction data, - SNB is granted access to the observer node and books and reconciles wCBDC holdings in its systems, - SDX executes technical and operational tasks such as crediting and debiting participants’ wCBDC accounts when issuing, settling and redeeming wCBDC, - commercial bank nodes store tokenized assets and wCBDC and initiate transactions on SDX. - Participation rules during initially foreseen Helvetia Phase III timeframe (Dec 2023 to Jun 2024) included: - limited set of participating financial institutions, - participants required to have a sight deposit account with the SNB, be admitted to the SIC payment system and be members of SDX, - participation conditional on signing dedicated contracts with the SNB and the ability to comply with Helvetia’s operational demands. - To contain project risks and costs, wCBDC availability during Helvetia Phase III was constrained: - wCBDC was solely available intra-day upon request on pre-agreed days (“Helvetia days”) and within a set time window, - wCBDC were tokenized and detokenized on the same day between 8 am and 3 pm and did not remain on SDX’s platform overnight, - In 2024, SDX registered 8 Helvetia days, which included bond issuances, SNB Bills and a secondary market transaction. - The SNB successfully issued digital SNB Bills on SDX in June 2024: - SNB issued digital SNB Bills totaling CHF 64 million to five Helvetia pilot banks, - issuance had a term of seven days via a private placement calibrated to Helvetia Phase III. - The SNB has adopted a technology neutral stance and has not insisted on wCBDC as the future standard for the cash settlement leg of securities transactions; it remains open to other solutions (including settlement through SIC, or the use of bankruptcy-protected tokenized private money forms). - The SNB extended availability of wCBDC on SDX in May 2025 to every day, while keeping intra-day limitation: - this extension could lead to an uptake of the volume and number of transactions, - this is consistent with the SNB’s phased approach and requires limited amounts of resources on the central bank and the FMI’s side, - as Helvetia remains a pilot and has yet to achieve wider adoption, the SNB has yet to develop a wCBDC policy stance which would include a more permanent governance and technical requirements applicable to third-party platforms hosting wCBDC. - SNB involvement and future assessments: - The SNB will regularly assess the prolongation of its involvement within the Helvetia project. ### Challenges - SDX is in a start-up phase and has yet to define and scale its business model; it faces interrelated challenges related to: - market acceptance of the FMI and the technology, - low settlement/transaction volumes on its platforms, - uncertainty regarding the future product offering and the availability of wCBDC on its platform. - Growth slower than expected in terms of participants and activity on its CSD and exchange platforms. - There are signs that the Swiss securities market has limited capacity to host two CSDs. - SDX is actively trying to attract non-domestic financial institutions and is hopeful to onboard a considerable number of new participants by the end of 2025 (a subset of these new members might join the Helvetia Pilot). - Competition and incumbency: - Current post-trade landscape in Switzerland rests on highly reliable and integrated traditional FMIs, requiring SDX to demonstrate its value proposition. - SDX is developing enhanced processes and expanding its offering; created a Market Advisory Group in 2025 to strengthen interactions with the industry. - Strategic shifts: - SDX’s own exchange was discontinued due to absence of transactions, - SDX plans a common strategy and offering with SIS and to organizationally integrate more closely with other Swiss FMIs in SGA to streamline processes and develop synergies, - SDX plans to put less focus on atomic trading and settlement or providing a standalone offering, and to focus on expanding the product range to other types of securities (equities, funds) and leveraging DLT for automatizing and streamlining processes and asset servicing related to tokenized securities. - wCBDC availability constraints remain: - Although extended to every business day in May 2025, wCBDC is available only intra-day, requiring banks to tokenize and detokenize at the beginning/end of the day, which requires dedicated processes that may reduce appeal and efficiency for participants. ### Recommendations and policy implications - FINMA: - FINMA shall closely monitor the upcoming developments at SDX which may warrant a revised supervisory approach for the FMI. - As SGA plans further integration of SDX with other parts of its FMI ecosystem, especially SIS, it will be important to address risks from interdependencies that might arise. - SNB: - The SNB shall establish a strategy which details under which conditions it would issue wCBDC on third party operated platforms. - If tokenization becomes more widespread, it is important to offer solutions for settlement in central bank money. These solutions could include expanding the availability of wCBDC and/or establishing links to the RTGS system, as highlighted by the SNB itself. - The SNB should expand its institutional discussions and deliberations on requirements for permanently issuing wCBDC on third party operated platforms, should a decision be taken to allow the settlement of tokenized assets with wCBDC on a permanent basis. This will provide both the SNB and FMIs with clarity and allow for an adequate planning and investment horizon. *Source: IMF staff report text on SDX oversight, Project Helvetia, and wCBDC pilot activities (excerpts).* ### 139. Switzerland positions itself as an attractive location for the fintech industry. ### Switzerland positions itself as an attractive location for the fintech industry. ### Market attractiveness and enabling factors - Switzerland ranks second in fintech market attractiveness in Europe, due to factors such as favorable business environment, macroeconomic conditions, digitalization of the economy, and regulatory frameworks. - Availability of a skilled workforce and investments in research and development ease the adoption of frontier technologies, including blockchain and artificial intelligence (AI). ### Government strategy and Digital Switzerland alignment - The government supports the digitalization of the financial sector through a broad plan of action contributing to the Digital Switzerland Strategy structured around five long-term domains: - (i) Education and skills - (ii) Security and trust - (iii) Framework conditions - (iv) Infrastructure - (v) Digital public servicers - The plan aims to promote a future-proof financial sector that is innovative, interconnected, and sustainable by: - Promoting new business models and technologies (e.g., Open Finance and DLT) - Strengthening ongoing initiatives (e.g., Cybersecurity and Green fintech) - Monitoring market developments to identify need for action (e.g., Cloud computing and AI) - Emphasis on regulation that removes unjustified barriers to entry; fintech license and the DLT Act cited as illustrations of regulatory adaptation. ### Fintech sector structure and scale - According to the 2023 IFZ Fintech Study, there are 483 fintech companies in Switzerland, a sector that has been growing since 2015. - Fintech companies focus on the business-to-business segment and have an international orientation, serving mostly international clients. - Most fintech firms offer services in payments and banking infrastructure and complement traditional financial activities. - Several fintech firms access incumbents’ data through Application Programming Interfaces (APIs) with consumers’ consent. - Only a few firms offer Banking-as-a-Service solutions ranging from digital onboarding to offering structured investment products. ### Technology focus and funding - While companies offer services based on various technologies, DLT-focused firms stand out: - “Approximately 0.2 percent of the total population or 31 as of December 2024,” provide algorithmic-based investment recommendations (figures informed by authorities). - DLT-focused companies have been steadily growing in number since 2015, outpacing Analytics/AI and Process Automation-focused companies. - The so-called Crypto Valley accounted for 5.1 percent of European venture funding in 2023. - Early movers include the Ethereum Foundation; notable regulated firms in banking and securities include Sygnum, Amina, and Taurus. ### Payments, e-ID, and infrastructure improvements - Instant payments launched in August 2024, allowing account-to-account transactions with immediate execution and final settlement in seconds. - Initially, around 60 financial institutions joined the system, covering over 95 percent of retail payment transactions. - By end-2026, all financial institutions active in retail payments will be reachable. - Payments are settled via Swiss Interbank Clearing (SIC) operated by SIX, reducing counterparty risk. - The system mirrors the European SEPA Instant Credit Transfer. - Government announced plan to offer an electronic ID (e-ID) from 2026, incorporating self-sovereign identity (SSI), privacy by design, data minimization, and decentralized data storage to enhance protection against identity theft in payments. ### Industry responses and technology investment - Incumbents view financial innovation as a key opportunity and increased investment in technology: - Respondents indicated that investments in crypto assets will increase by 50 percent. - Banks have been steadily increasing the proportion of investment in technology; higher expense in IT-related labor costs vis-à-vis non-IT related costs parallels this trend. - 49 percent of surveyed institutions indicated that they have hired between one to five data scientists on a full-time basis. - Deployment of data analytics products: Fraud detection 61 percent, Risk management 49 percent, Optimization of marketing and sales 37 percent. ### Financial stability and operational risks - Financial stability risks from fintech activities are limited at present but can rapidly escalate. Key concerns include: - Digital fraud and evolving cybercriminal ecosystem, with non-technical criminals using cyber tools. - Fraudsters bypassing security measures (e.g., two-factor authentication, biometrics). - Further adoption of AI could increase market volatility, dependencies on third-party providers, and cyber and market-manipulation risks. - Crypto assets can amplify vulnerabilities: increasing linkage with incumbents; increased use of leverage in investment strategies; concentration risk of trading platforms; and less intensive global oversight. - Low levels of investor and consumer understanding of crypto assets, money laundering, cyber-crime, and ransomware. - Business models such as Open Finance and Banking-as-a-Service can raise concerns about concentration of counterparties, third-party risk management, and interconnectedness. ### Regulatory and supervisory framework - Institutional roles: - State Secretariat for International Finance (SIF) develops basis for financial regulation; reports to the Federal Department of Finance (FDF). - FINMA acts as the prudential and conduct regulator and supervisor for financial markets; statutory powers codified in Swiss Financial Market Supervisory Act. - Key laws and instruments: - FinSA establishes supervisory framework for providing financial services and offering financial instruments; relevant to tokenized equity rights or bonds. - FinIA provides licensing regime for financial institutions using a "pyramid approach" with lighter rules for portfolio managers and trustees. - Fintech-specific regulations include the Fintech license, a regulatory sandbox, and settlement accounts exemption; based on technological-neutrality principle. - Fintech license and sandbox specifics: - Fintech license allows companies to accept deposits of up to CHF 100 million from the public or of crypto assets (payment-tokens) provided deposits are not invested and no interest is paid. - Sandbox allows accepting public deposits of up to CHF 1 million without a license but typically under SRO-supervision regarding AML. - Other applicable laws: Banking Act (BA), FinMIA (financial market infrastructures), Anti-Money Laundering Act (AMLA), Consumer Credit Act (CCA), Collective Investment Schemes Act (CISA). - DLT and token treatment: - FINMA categorizes tokens as payment tokens, utility tokens, and asset tokens. - The DLT Law (came into force in 2021) integrates DLT into existing legal framework, including segregation of clients’ crypto assets from custodian assets. - FINMA issued guidelines on stablecoins and staking. ### DLT developments and notable milestones - Early regulatory recognition: FINMA's "ICO Guidelines" in February 2018 and stablecoins supplement in September 2019. - First licensed crypto asset manager: August 2018, Crypto Fund AG received asset manager of collective investment schemes license. - First crypto asset ETP: November 2018, 21Shares AG launched world's first exchange-traded product for crypto assets on SIX. - Government report on DLT: December 2018; draft law prepared and finalized in November 2019. - Establishment of Sygnum and SEBA Bank (Amina): August 2019, first fully regulated crypto-focused banks. - SIX Digital Exchange (SDX) initiatives: December 2018 launch; November 2021 issuance of world's first digital bond in a fully regulated environment; September 2021 regulatory approval as a central securities depository and trading venue. - First approved crypto fund: September 2021 (restricted to qualified investors). - DLT Law implementation: 2021. - Tokenization initiatives: tokenized bonds issued by UBS and City of Lugano on SDX; Sygnum tokenized artwork in cooperation with Artemundi. - Proof of concept: CMTA and market participants conducted a DLT-based issuance, trading, and settlement proof of concept in December 2022 on an Ethereum test blockchain. - DLT-based infrastructure and core banking on blockchain examples: aXedras AG, Fiat24. - First DLT trading facility: In 2025, FINMA licensed BX Digital as the first Distributed Ledger Technology trading facility; settles in Swiss francs and executes transfers on a public blockchain with verified delivery versus payment (DvP) agreements and direct connection to Swiss National Bank payment system; derivatives and anonymous instruments that could impede AML or impair stability/integrity are not permissible for trading. ### FINMA capacity, Fintech Desk, and monitoring - FINMA’s Fintech Desk: - Staff of eight people responsible for a range of activities including competence center, participation in working groups, authorization of fintech license and DLT trading facility applicants, and initial regulatory assessments. - Number of enquiries has stabilized at around one hundred per year over the last four years. - Fintech Desk resources are stretched given multiplicity of tasks, project complexity, overseas expansion of DLT-focused regulated firms, and increasing onsite inspection involvement. - Supervision and monitoring approach: - FINMA relies on audit firms mandated by supervised institutions to review compliance with regulatory requirements; FINMA issued guidelines on audits of fintech licensed firms. - On a risk-oriented basis, FINMA collects information on public deposits held, composition of capital, number of customers, and liquidity position. - FINMA can conduct on-site inspections and horizon scanning focusing on governance and risk management (e.g., Artificial Intelligence). - FINMA exchanges views with SNB, SIF, and FFA; participates in workshops and roundtables on digitalization topics. - FINMA is in the process of improving data collection on interdependencies with technology and other providers to address systemic concentration risks. *Source: Switzerland: Technical Note on fintech developments (as presented in the supplied PDF content).* ### 154. FINMA engages in financial literacy activities aiming at improving consumers’ ### FINMA engages in financial literacy activities aiming at improving consumers’ knowledge on fintech topics ### Financial literacy, enforcement, and investor protection - FINMA provides public warnings for market participants to review, highlighting potential risks in the financial market. - FINMA issued guidance on how investors can protect against fraudulent activities, covering topics such as crypto assets and crowdfunding. - Enforcement activity (2020–2024): - FINMA initiated 385 investigations into fintech companies. - 235 cases concluded with companies being published in the regulator’s warning list. - 12 cases gave rise to enforcement proceedings due to companies conducting business without licensing. - 31 cases resulted in criminal charges. - The total number of investigations includes seven cases into companies with links to crowdfunding. - As of today, 42 cases remain under investigation. ### International cooperation - Switzerland participates in international organizations related to fintech: BCBS, FATF, FSB, IOSCO, IAIS, and OECD. - FINMA participation and agreements: - FINMA experts participate in the BCBS Financial Technology Group and in the FSB Crypto Working Group. - FINMA subscribed numerous Memorandums of Understanding (MoUs) for bilateral cooperation on fintech topics. - FINMA subscribed the IOSCO MoU to facilitate cooperation and exchange of information with foreign authorities related to new products, services and technologies in a fintech context. - Under Swiss law, FINMA can also cooperate with foreign authorities outside the IOSCO MoU when such an authority shows jurisdiction under its local applicable laws. ### Crypto assets — market developments and domestic adoption - Global market snapshot (since November 2024): - On December 6th, total market capitalization of crypto assets hit a record $3.8 trillion. - Bitcoin surpassed the $100,000 mark for the first time. - An FSB report indicates the market value of crypto assets represents less than one percent of global financial system assets. - Swiss adoption and market activity: - Use of crypto assets as a means of payment in Switzerland is extremely rare; investment is the preferred alternative. - Study findings: crypto investors’ main interests are curiosity and experimentation. - Turnover for indirect investments in crypto assets: - Peaked in the first half of 2021 at CHF 1,200 million. - Decreased to CHF 183 million as of December 2023. - As of December 2024, FINMA-regulated banks and securities firms held in custody about CHF 13.9 billion of crypto assets. - Comparative banking figures (end-of-2024): - CHF 1,983.5 billion deposits. - CHF 9,782.5 billion assets under management. - Regulated entities supervised by FINMA (end-2024): - 40 banks and securities firms providing crypto assets services. - SROs supervised 203 Virtual Asset Service Providers. - Number of banks and securities firms regulated by FINMA: 30 in 2022 and 34 in 2023. - Crypto exchange activity (indicative figures from HSLU study): - Monthly trading volume on centralized exchanges: - Peaked in May 2021 at CHF 21 billion. - Reached CHF 4.4 billion as of June 2024. - Decentralized exchanges: - Peak at CHF 1.3 billion by November 2021. - First half of 2024 most relevant: Pancakeswap, Raydium, Balancer for Swiss investors. - Derivatives crypto exchanges: - In June 2024, trading volumes reached CHF 20 billion. - First half of 2024 most popular: Binance, XT Futures, Bybit. - Banks’ involvement with exchanges is very limited and decreased significantly after events such as FTX and Terra-Luna. - Crypto exchanges do not have presence in Switzerland and are not subject to mandatory reporting; authorities should periodically collect information on trading activity and intensify investor warnings. ### Regulatory framework and supervisory measures - DLT Act (2021) outcomes: - Outlined prudential supervision of crypto-asset custodians. - Defined ledger-based securities. - Created a dedicated license for DLT-securities trading. - FINMA guidance and measures: - Drafted guidance on taxonomy of crypto assets, issuance of stablecoins, and staking services (FINMA Guidance 08/2023 “Staking”). - Imposed amendments to stock exchange rules and regulations to enhance investor protection related to crypto-ETPs (FINMA’s Annual Report 2023, page 65). - Requires a “Cryptoassets Resolution Package” for regulated entities involved in custody and staking, containing: - Description of custody type. - Details of contact persons with access to private keys. - Details of third-party custodians. - If Swiss banks and securities firms opt for custody abroad, they must meet certain supervisory requirements; failure to meet them may impact capital requirements. - Foreign investment funds linked to crypto assets: - Not subject to FINMA approval if solely distributed to qualified investors. - FINMA indicated it is working on incorporating distribution data in its periodic reports. ### Taxonomy of crypto assets (FINMA classification) - Token categories based on economic function: - Payment tokens: intended as means of payment; issuance subject to AMLA regulations. - Utility tokens: provide digital access to an application or services; may be treated as securities if they have an investment purpose. - Asset tokens: represent a claim against an issuer; analogous to equities, bonds, and derivatives; include tokens enabling physical assets to be traded on the blockchain. - Hybrid tokens may pertain to more than one category; hybrid tokens that meet criteria are deemed to be both securities and means of payment and must meet cumulative regulatory requirements. - Under FinMIA: - Tokens considered securities if they represent an uncertificated security and are standardized and suitable for mass standardized trading. - Tokens representing derivatives in a standardized form and suitable for mass standardized trading will be treated as securities. - Tokens issued via pre-sale or pre-funding of ICOs can receive the same treatment as securities if standardized and suitable for mass standardized trading. ### Prudential treatment and capital requirements - Basel Committee standard on crypto asset exposures (effective January 1st, 2026): - Classifies banks’ exposures into two groups based on meeting certain conditions. - Group 1: - Includes tokenized traditional assets (Group 1a) and crypto assets with effective stabilization mechanisms (Group 1b). - Capital requirements based on risk weights of underlying exposures as set out in existing Basel Framework. - Group 2: - Includes crypto assets that do not meet classification conditions (e.g., bitcoin). - Exposures are subject to a risk weight of 1,250 percent. - Standard describes application to operational risk, liquidity, leverage ratio, and large exposures requirements. - FINMA local approach: - Decided to apply an 800 percent risk weight to on-balance-sheet exposures. - Many prevalent crypto services by banks (trading for clients, third-party custody, transfer in and out) are not subject to capital charges. - Anecdotal industry evidence suggests some market participants may experience difficulties meeting Basel standard capital requirements. ### Stablecoins — guidance and supervisory concerns - Stablecoin characteristics and supervisory focus: - Two distinguishing characteristics: (i) existence of stabilization mechanism, and (ii) usability as means of payment and/or store of value. - Holders generally have a payment claim against the issuer at any time. - FINMA 2024 guidance complements 2019 stablecoin guidance: - Addresses applicable law for stablecoin projects and risks to supervised institutions. - Highlights increased AML/CFT risks and the potential to facilitate circumventing sanctions. - Notes rising use of default guarantees provided by banks to stablecoin issuers and outlines minimum requirements for these guarantees. - Classification of stablecoins: - Deposits: if underlying assets (reserves) are managed for the account and risk of the issuer. - Collective investment schemes: if reserves are managed for the account and risk of the stablecoin holder. - Regulation includes exemptions to licensing obligations, mainly related to issuing stablecoins with bank guarantee. - AML/CFT compliance: - Stablecoin issuer or an appropriately supervised financial intermediary must verify identity of stablecoin holder and beneficial owner. - Contractual and technological transfer restrictions required for issuance by supervised institutions. - Default guarantees: - Must meet disclosure and quantitative minima; customers must be informed of the existence of the guarantee. - Default guarantee must cover at least the total of all public deposits including any interest earned by customers and the total deposits covered must never exceed the upper limit of the default guarantee. - FINMA underscores stablecoin holders do not benefit from the same protection granted to bank depositors. - Risks to banks issuing default guarantees: - Exposure to legal, reputational, and regulatory risks, particularly AML/CFT, if dishonest stablecoin holders execute the default guarantee against the issuer bank. - SIF work: - SIF is working on amendments to the regulatory framework for issuance of stablecoins as part of the legislative project to enhance the fintech license. ### Recommendations (crypto prudential and supervisory capacity) - Authorities should assess banks’ crypto asset exposures comprehensively and implement the Basel prudential standard in a faithful and timely manner. - Authorities should evaluate whether on and off-balance sheet positions merit additional capital charges. - Given the proximity of the prudential standard implementation date, authorities should announce when and how they will adopt it. - FINMA should be equipped with sufficient resources: - FINMA appears understaffed in fintech supervision. - Number of regulated entities has consistently increased in the last three years. - Enquiries have stabilized in number but become more complex, requiring careful analysis by the Fintech Desk. - New entities (e.g., the DLT trading facility), expansionary plans abroad of crypto-related licensed firms, and increasing interest in offering crypto services call for intensified supervision. - Implementing pending aspects of international standards while keeping up with financial innovation developments requires appropriate resources for FINMA. ### Fintech license and regulatory sandbox - Fintech License (introduced 2019): - FINMA grants and oversees the license and has issued guidelines for the application process. - Permits institutions to accept public deposits up to CHF 100 million or crypto assets, if these are not invested or no interest is paid on them. - If an institution exceeds the CHF 100 million threshold, it must inform FINMA within ten days and apply for a banking license within ninety days. - Minimum capital requirement: CHF 300,000 or 3 percent of deposits. - No risk-based capital or liquidity requirements; subject to less auditing and monitoring compared to banks. - FINMA authorized six companies to operate under the fintech license, of which four are fully operative. - Client funds can be accepted and corresponding accounts held for an unlimited period, but funds cannot be invested or earn interest—business models have been limited to payment services. - In the event of fintech institution bankruptcy, client assets are neither privileged nor protected by deposit protection; future clients must be informed (Art. 1b para. 4 let. d Banking Act and Art. 7a para. 3 Banking Ordinance). - Federal Council report (16 December 2022) recognized need for action to be addressed in the regulatory project amending financial market legislation regarding innovative business models; bill to be submitted for consultation in 2025. - Regulatory sandbox (approved 2017): - Operates as an exemption to banking law. - Entities in the sandbox can receive deposits up to CHF one million, are not allowed to engage in interest rate differential business, and are not subject to licensing. - Depositors must be informed that the business is not supervised by FINMA and deposit is not covered by deposit guarantee. - Entities operating in the sandbox are not required to report to FINMA; authorities have little data on this license-free area. *Italicized source: IMF — Switzerland Financial Sector Assessment, content from pages provided in the source PDF.* ### 169. The government fosters a market-driven approach for open finance. FDF set in 2022 ### 1cheea2025010-source-pdf - 169. The government fosters a market-driven approach for open finance. FDF set in 2022 ### Open finance: policy intent and progress - The government fosters a market-driven approach for open finance; FDF set in 2022 targets conducive to a voluntary exchange of customers’ information via APIs between financial institutions and third parties or open finance. - Policy objectives: strengthen customers’ ability to freely use their financial data and boost the innovative capacity and competitiveness of the Swiss economy and the financial sector by promoting: - adoption of common standards for exchange of data, - open interfaces, - scalable solutions. - Developments reported in 2024: - Subscription of a memorandum of understanding (MoU) on multibanking by 40 banks. - Other targets not yet achieved: common standards, opening of interfaces, scalability. - FDF concluded that no government measures are required at present. ### Data protection and consumer protection foundations - Legal and institutional framework: - Federal Act on Data Protection (FADP) is the central legislation regulating data protection in Switzerland; consent on data processing is valid only if given voluntarily and subjects were provided with adequate information ("informed consent"). - Federal Data Protection and Information Commissioner (FDPIC) enforces the FADP and can investigate complaints and issue rulings. - Switzerland’s consumer protection framework includes laws protecting customers from unfair business practices, excessive interest rates, and faulty products. ### Open finance platforms and market uptake - Multiple platform providers exist, but uptake is limited. - Example: SIX’s platform bLink: - Enables exchange of data; connects data providers and data users (financial institutions and third parties) via APIs. - Manages administrative relationships between participants and ensures compliance with security standards. - API standards support banking and insurance use cases: account information, payment initiation, loans, wealth management. - Features: one uniform contract, standardized admission test for all participants, digital consent management, standardized interfaces. - Each new participant must pass the admission process on bLink. - Current transaction volumes: - Open Finance platforms funnel significantly lower volumes of transactions vis-à-vis basic financial infrastructures. ### Governance, risks, and recommended actions for open finance - Observed benefits and risks: - Potential positive impacts: foster competition, spur innovation, enhance customer empowerment and experience. - Reported risks from early adopters: increased fraud, data security, protection and privacy risks. - Need for coordination: - Open finance framework requires coordination between the financial sector and financial, cybersecurity, consumer, competition, and data protection regulators, even under market-driven scenarios. - Public authorities should ensure governance structures provide adequate stakeholder representation. - Authorities should promote consumer information and awareness and ensure proper mechanisms for redress. - Review whether private infrastructure/standards exclude participants or produce unfair pricing. - Recommendation: - Authorities should strengthen the governance structure of the open finance framework: - Establish formal coordination and collaboration instances among financial, competition, cybersecurity, data, and consumer protection authorities. - Ensure authorities have powers and resources to articulate and implement risk-based supervision of all participants and to address consumer protection issues. - Monitor pricing and establish principles for compensation to warrant fairness and reduce system complexity. ### Use of AI by the financial sector (overview, regulation, and supervisory expectations) - Government actions and mandates: - FC instructed FDF and other agencies in 2022 to prepare an overview of the AI regulatory framework applicable to the financial sector with three objectives: - summarize relevant regulations, - highlight potential for innovation and reduce risk of abuse and other risks, - identify potential updates in the existing framework and standardization requirements. - November 2023: FC ordered preparation of an overview of possible regulatory approaches to AI considering different industries, the EU AI Act, and the Council of Europe’s AI Convention. - February 2025: FC mandated the FDJP to draft a bill by the end of 2026 to implement the Council of Europe’s AI Convention, defining necessary legal measures, particularly in transparency, data protection, non-discrimination and supervision. - No AI-specific financial market legislation exists; financial market regulations are technology-neutral and set principles for governance and risk management. - FINMA supervisory activity and expectations: - In 2024 FINMA set out expectations on risk management practices by regulated institutions. - 2022 FINMA survey: around half the institutions polled are using AI or plan to do so. - Usage patterns: most institutions develop applications in-house but also use third-party service providers; some rely completely on externally developed applications. - Risks highlighted: operational issues including model risk (robustness, explainability, bias); data-related risks (availability, quality, security); IT and cyber risks; third-party dependencies; legal and reputational risks. - Supervisory findings on institutions’ responses: - Institutions have focused on data protection risks but less on model risks. - Institutions adopted a narrow definition of AI and deploy AI systems in a decentralized manner, complicating comprehensive inventories. - Shortcomings observed: lack of defined requirements or data quality controls; weak performance indicators, testing and ongoing monitoring; insufficiently detailed and recipient-oriented documentation; limited explainability (supervisors observed that institutions often cannot understand, explain, or reproduce systems’ outputs); lack of independent review of AI systems. - FINMA continues to refine expectations on governance and risk management following a technology-neutral, proportional, standardized approach across sectors and based on international recommendations. ### Regtech and Suptech - Government support and infrastructure: - Government recognized importance of regulatory and supervisory technologies in its financial market strategy of December 2020. - Fedlex platform launched to provide secure online access to all federal legislation; publications must follow internationally recognized standards and be available in machine-readable formats. - FINMA issued regulation permitting video and online identification of clients (Circular 2016/7 and subsequent revisions). - Government welcomed data-driven supervisory initiatives by FINMA and SNB and integration of Suptech tools. - FINMA Suptech deployment and impacts: - FINMA adopted a Digital Strategy in 2022 emphasizing technology use. - 2023 Suptech deployments included tools for summarization of market developments, processing of transactions for conduct supervision, supporting processing of securities market applications, and calculation of regulatory indicators for the insurance sector. ### Crowdfunding: scale, composition, and financial stability considerations - Market size and composition: - By March 2024 there were thirty-six crowdfunding platforms operating in Switzerland. - Amounts raised: - CHF 558.7 million raised during 2023. - CHF 4.2 billion raised in total since the first platform launch in 2018, peaking in 2021. - Business models (three out of five considered fintech activities due to proximity with financial sector): - Crowdinvesting, - Crowdlending, - Invoice trading. - Role and financial-stability assessment: - Crowdfunding serves mostly SMEs. - Comparison with banking credit in 2023: - Total volume of credit granted by Swiss banks in 2023 totaled CHF 1,36 trillion, of which CHF 395.2 billion were loans to SMEs. - Total crowdlending during 2023: CHF 398.1 million. - Between 2020–2024 FINMA conducted investigations into companies with links to crowdfunding for suspected unauthorized activities under financial market laws, resulting in: - two companies published on FINMA’s warning list, - one company criminally charged, - others resolved compliance issues or were not found in violation. - As of the report, around six informal investigations against companies with a connection to crowdfunding are ongoing. - Conclusion on systemic risk: - Crowdfunding represents a niche segment that does not pose significant risks to financial stability. *Source: 1cheea2025010-source-pdf - 169. The government fosters a market-driven approach for open finance. FDF set in 2022* ### Appendix VI. Basic Statistics ### Appendix VI. Basic Statistics ### Overview — SIC Daily Averages - Daily Average Number of transactions (in thousands) and Turnover (in CHF millions): - 2019: 2620  ; 158024 - 2020: 2870  ; 178214 - 2021: 3490  ; 163319 - 2022: 3720  ; 199647  - 2023: 3860  ; 227840 - 2024 (Q2): 4000 ; 227840  - Source: Swiss Authorities ### SIX X-CLEAR — Contracts Cleared (Daily Average), Volume and Value - Equities (Volume in thousands ; Value in CHF millions): - 2019: 2’338.58 ; 25’235.51 - 2020: 2’677.84 ; 26’910.61 - 2021: 2’844.22 ; 29’886.26 - 2022: 3’139.46 ; 34’507.69 - 2023: 2’549.52 ; 29’565.24 - 2024 (Q2): 2’562.32 ; 37’005.08 - Bonds (Volume in thousands ; Value in CHF millions): - 2019: 2.111 ; 354.068 - 2020: 1.951 ; 343.013 - 2021: 1.491 ; 305.269 - 2022: 1.975 ; 353.943 - 2023: 2.589 ; 339.583 - 2024 (Q2): 2.164 ; 282.54 - ETD derivatives (Volume in thousands ; Value in CHF millions): - 2019: 0.945 ; 139.12 - 2020: 1.247 ; 118.788 - 2021: 0 ; 0 - 2022: 0 ; 0 - 2023: 0 ; 0 - 2024 (Q2): 0 ; 0 - OTC derivatives (Volume in thousands ; Value in CHF millions): - 2019: 0.011 ; 3.967 - 2020: 0.007 ; 1.819 - 2021: 0 ; 0 - 2022: 0 ; 0 - 2023: 0 ; 0 - 2024 (Q2): 0 ; 0 - Other (Volume in thousands ; Value in CHF millions): - 2019: 18.92 ; 424.55 - 2020: 27.48 ; 497.04 - 2021: 29.90 ; 474.78 - 2022: 38.09 ; 757.53 - 2023: 35.30 ; 793.18 - 2024 (Q2): 45.68 ; 1’156.52 - Total (Volume in thousands ; Value in CHF millions): - 2019: 2’360.57 ; 26’157.21 - 2020: 2’708.53 ; 27’871.27 - 2021: 2’875.61 ; 30’666.31 - 2022: 3’179.518 ; 35’619.17 - 2023: 2’587.412 ; 30’698.00 - 2024 (Q2): 2’610.16 ; 38’444.14 - Source: Swiss Authorities ### SIS — Securities Held (Year-End) and Delivery Instructions (Daily Averages) - Securities held (YE) (Volume in thousands ; Value in CHF millions): - Debt Securities: - 2019: 174 ; 811332.89 - 2020: 164.7 ; 732029.32 - 2021: 149.01 ; 696308.75 - 2022: 163.42 ; 722970.8 - 2023: 193.26 ; 798570.27 - 2024 (Q2): 206.39 ; 803776.76 - Equities: - 2019: 225.2 ; 2168905.31 - 2020: 238.77 ; 2238697.78 - 2021: 250.9 ; 2552501.46 - 2022: 250.31 ; 2023125.89 - 2023: 248.5 ; 2044216.88 - 2024 (Q2): 239.38 ; 2214784.01 - Other: - 2019: 288.69 ; 568242.22 - 2020: 340.69 ; 608345.83 - 2021: 386.27 ; 700768.87 - 2022: 389.86 ; 615142.9 - 2023: 412.83 ; 648706.66 - 2024 (Q2): 463.5 ; 710580.39 - Total: - 2019: 687.89 ; 3548480.42 - 2020: 744.16 ; 3579072.93 - 2021: 786.18 ; 3949579.08 - 2022: 803.59 ; 3361239.59 - 2023: 854.59 ; 3491493.81 - 2024 (Q2): 909.27 ; 3729141.16 - Delivery instruction (daily averages) (Volume in thousands ; Value in CHF millions where provided): - Free of Payment: - 2019: 16.842 ; N.a. - 2020: 20.9 ; N.a. - 2021: 22.18 ; N.a. - 2022: 21.24 ; N.a. - 2023: 20.79 ; N.a. - 2024 (Q2): 24.94 ; N.a. - Delivery Vs Payment: - 2019: 105.127 ; 31051.95 - 2020: 139.09 ; 34440.21 - 2021: 143.78 ; 34232.55 - 2022: 126.06 ; 33638.23 - 2023: 121.51 ; 35395.96 - 2024 (Q2): 131.82 ; 39323.25 - Debt securities (delivery instruction): - 2019: 7.121 ; 4703.29 - 2020: 8.1 ; 12240.87 - 2021: 8.78 ; 13351.21 - 2022: 8.93 ; 14752.68 - 2023: 10.5 ; 1755142.23 - 2024 (Q2): 11.2 ; 18428.58 - Equities (delivery instruction): - 2019: 79.6 ; 24493.32 - 2020: 101.56 ; 20770.86 - 2021: 105.03 ; 19724.75 - 2022: 89.8 ; 17781.75 - 2023: 85.01 ; 16911.17 - 2024 (Q2): 82.5 ; 196657.32 - Other (delivery instruction): - 2019: 18.4 ; 1855.34 - 2020: 29.43 ; 1428.48 - 2021: 29.97 ; 1156.59 - 2022: 27.33 ; 1103.8 - 2023: 26.01 ; 972.56 - 2024 (Q2): 38.11 ; 1237.35 - Total (delivery instruction): - 2019: 121.97 ; 31051.95 - 2020: 160 ; 34440.21 - 2021: 165.96 ; 34232.55 - 2022: 147.3 ; 33638.23 - 2023: 142.31 ; 35396 - 2024 (Q2): 156.76 ; 39323.25 - Source: Swiss Authorities ### SDX — Securities Held (Year-End) and Delivery Instructions (Daily Averages) - Securities held (YE) (Volume in thousands ; Value in CHF millions): - Debt Securities: - 2020: 0.0 ; 0.0 - 2021: 0.0 ; 79.7 - 2022: 0.0 ; 451.7 - 2023: 0.0 ; 710.1 - 2024 (Q2): 0.0 ; 1’258.6 - Other: - 2020: 0.0 ; 0.0 - 2021: 0.0 ; 0.0 - 2022: 0.0 ; 0.0 - 2023: 0.0 ; 0.0 - 2024 (Q2): 0.0 ; 0.0 - Total: - 2020: 0.0 ; 0.0 - 2021: 0.0 ; 79.7 - 2022: 0.0 ; 451.7 - 2023: 0.0 ; 710.1 - 2024 (Q2): 0.0 ; 1’258.6 - Delivery instruction (daily averages) (Volume in thousands ; Value in CHF millions where provided): - Free of Payment: - 2020: 0.0 ; 0.0 - 2021: 0.0 ; 20.8 - 2022: 0 ; 374.6 - 2023: 0 ; 352.7 - 2024 (Q2): 0.0 ; 683.1 - Delivery Vs Payment: - 2020: 0.0 ; 0.0 - 2021: 0 ; 99.9 - 2022: 0 ; 75.8 - 2023: 0 ; 37.7 - 2024 (Q2): 0.0 ; 142.8 - Debt securities (delivery instruction): - 2020: 0.0 ; 0.0 - 2021: 0.0 ; 120.7 - 2022: 0 ; 450.4 - 2023: 0.0 ; 390.4 - 2024 (Q2): 0.0 ; 825.9 - Other (delivery instruction): - 2020: 0.0 ; 0.0 - 2021: 0.0 ; 0.0 - 2022: 0 ; 0 - 2023: 0.0 ; 0 - 2024 (Q2): 0.0 ; 0.0 - Total (delivery instruction): - 2020: 0.0 ; 0 - 2021: 0.0 ; 120.7 - 2022: 0 ; 450.4 - 2023: 0.0 ; 390.4 - 2024 (Q2): 0.0 ; 825.9 - Source: Swiss Authorities ### Participation in Swiss FMIs (Number of Participants, YE 2023) - SIX SIC: - Domestic: 261 - Foreign: 57 - Total: 318 - of which Central Banks: 1 domestic ; 0 foreign ; 1 total - of which Banks/FMIs/Other: 260 domestic ; 57 foreign ; 317 total - SIX x-CLEAR: - Domestic: 42 - Foreign: 27 - Total: 69 - of which Banks: 40 domestic ; 16 foreign ; 56 total - of which FMIs: 0 domestic ; 2 foreign ; 2 total - of which Other: 2 domestic ; 9 foreign ; 11 total - SIX SIS: - Domestic: 194 - Foreign: 125 - Total: 319 - of which Banks: 135 domestic ; 80 foreign ; 215 total - of which Other: 59 domestic ; 45 foreign ; 104 total - SDX: - Domestic: 11 - Foreign: 1 - Total: 12 - of which Central Banks: 1 domestic ; 0 foreign ; 1 total - of which Banks: 9 domestic ; 1 foreign ; 10 total - of which FMIs: 1 domestic ; 0 foreign ; 1 total - SIX TR (as per 09.12.2024): - Domestic: 136 - Foreign: 22 - Total: 158 - of which Central Banks: 0 ; 0 ; 0 - of which Banks: 108 domestic ; 2 foreign ; 110 total - of which FMIs: 0 ; 0 ; 0 - of which Other: 28 domestic ; 20 foreign ; 48 total - Source: Swiss Authorities ### Appendix VII — The Fintech Ecosystem (high-level points from source) - Investment management and banking have experienced the largest increase in FinTech companies. - Fintech companies operate in the B2B segment and are externally oriented. - DLT companies stand out in the fintech ecosystems. - Banks are increasingly investing in technology. - Turnover in indirect investment peaked in 2021. - Crowdfunding is a niche sector. - Sources: IFZ FinTech Study 2023 and 2024; Crowdfunding Monitor 2024 ### Appendix VIII — Regulated Crypto Asset Service Providers (high-level points from source) - Regulated entities mostly hold off-balance sheet positions. - Exchange activities concentrate the attention of SROs. - Sources: FINMA *Source: Swiss Authorities; IFZ FinTech Study 2023 and 2024; Crowdfunding Monitor 2024; FINMA.* --- _Source: https://www.imf.org/-/media/files/publications/cr/2025/english/1cheea2025010-source-pdf.pdf_