Financial market regulation


The G20 countries have committed to subjecting the global financial system to far-reaching reforms. Key regulatory adjustments have increased system stability and also established more effective and extensive client protection.

International efforts

The international financial regulation agenda has progressed substantially though key open issues remain to be completed (finalization of Basel capital framework, resolution funding etc.). The authorities' focus is now shifting towards implementation review aimed at addressing inconsistencies and unintended consequences. The Financial Stability Board (FSB) is designing a policy evaluation framework to guide the post-implementation evaluations of the effects of the G20 reforms and is involving the industry in the process. The framework's purpose is to analyze whether the reforms are achieving their intended outcomes.

At the national level, the regulation plans of the EU and other countries are already well underway and some have already been finalized. In the EU, these include in particular the European Market Infrastructure Regulation (EMIR), the Markets in Financial Instruments Directive (MiFID II) and the related Markets in Financial Instruments Regulation (MIFIR). The key regulatory project in the US is the Dodd-Frank Act. The post-crisis international standard setting and the role of the G20, the FSB and the BCBS is increasingly being called in to question by some jurisdictions, however. For the success of the agreed financial sector reforms it will be important to continue aiming for a globally consistent rule book and interpretation.

Swiss regulatory approaches

In Switzerland, too, government regulations for the financial markets are continuously reviewed and optimized. Effective regulation is not only necessary for the financial sector, but it is also an important part of the framework conditions for Switzerland as a business location. Switzerland therefore places great importance on modern financial market regulations. In this context, the following three new laws are planned in the financial market area: the Federal Financial Services Act, Financial Institutions Act and Financial Market Infrastructure Act. These planned reforms will also simplify and modernize the structure of financial market legislation. The Federal Department of Finance is responsible for coordinating and ensuring the consistency of the various measures.

The FinSA sets out cross-sector rules for offering financial services and distributing financial instruments. In terms of content, the rules are based on the EU directives (MiFID, Prospectus Directive, PRIPs project), with adjustments made to reflect the specific Swiss circumstances. The new information and investigation obligations for financial service providers are at the core of the new law. The extent of these obligations depends primarily on the type of financial service provided. However, the conduct and product provisions are adjusted to the required level of client protection (retail clients vs. professional clients). Uniform rules are provided for with regard to the prospectus duty (with simplifications envisaged for SMEs) as well a key information document.

FinSA / FinIA on the FDFs website

What is our view: The FinSA offers a practicable level of investor protection through the introduction of concrete information and documentation obligations for financial service providers. These improve the comparability and transparency of products for clients and allow them to make informed investment decisions. The industry benefits from improved legal and planning certainty. This is an essential foundation for the continued success of the Swiss financial market and the preservation of jobs in Switzerland.

The FinIA seeks to regulate the supervision of all financial service providers that are involved in the wealth management business in a single harmonized piece of legislation. The main change concerns the prudential supervision of managers of individual client assets, managers of the assets of occupational benefits schemes and trustees.

FinSA / FinIA on the FDFs website

What is our view: An appropriately designed supervisory regime for independent asset managers is of great importance for the competitiveness and sustainability of the Swiss financial center. It is a seal of quality for financial market participants that is internationally understood.

The FMIA adapts the regulation of the financial market infrastructures and derivatives trading to market developments and international provisions. In particular, the FMIA means that the three central obligations of derivatives trading also apply in Switzerland:

  • Settlement through a central counterparty
  • Reporting to a trade repository
  • Reduction of risks

What is our view:The FMIA makes a significant contribution to a robust and efficient financial market infrastructure, particularly in the area of OTC derivatives trading. For UBS it is important that a regulation is found quickly and that provisions are made for appropriate transition periods.

FMIA on the FDFs website


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