Reuters: Regulatory News: Switzerland seeks tighter off-exchange oversight

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Switzerland seeks tighter off-exchange oversight Aug 29th 2012, 11:47 ZURICH | Wed Aug 29, 2012 7:47am EDT ZURICH Aug 29 (Reuters) - The Swiss government plans to tighten oversight of privately-conducted derivatives trading, bringing the country into line with a broader push in the United States and European Union. Regulators in Europe and the United States want the over-the-counter (OTC) market, in which bonds, currency and financial derivatives are traded bilaterally between banks, fund managers and hedge funds, to become more like exchange-based markets where buyers and sellers trade equities and futures more transparently. "The existing Swiss regulation of financial market infrastructure is no longer appropriate given the developments on the financial markets," the Swiss government said in a statement on Wednesday. "Furthermore, it also no longer satisfies the new standards developed by international bodies for important financial market infrastructure institutions such as trading platforms, central settlement offices, securities depositories or trade repositories." The move to reform followed the collapse of Lehman Brothers in late 2008 when open trades on traditional exchanges took days to resolve, while some trades in the most complex OTC products were still unresolved years later. Changes to European trade in financial instruments is being made via the reform of a 2007 directive known as MiFID (Markets in Financial Instruments Directive), while U.S. authorities are working on similar OTC reforms and the comprehensive Dodd-Frank Bill is due to be implemented this year. Switzerland's regulation of derivatives won't move as quickly. The government said a draft consultation paper would be prepared by next spring. Link this Share this Digg this Email Reprints

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