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FINMA approves trading venues in the US and Mexico

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Switzerland‘s Financial Market Supervisory Authority (FINMA) has approved trading venues in the United States and Mexico, according to a World Trade Organization (WTO) report.

In July 2019, Switzerland adopted a protection measure against the decision of the European Union (EU) not to extend the recognition of the equivalence of Swiss stock market regulations.

This decision would have effectively prohibited EU investment companies from trading certain securities on Swiss stock exchanges.

Under this protection measure, FINMA has approved trading venues in the United States, Mexico, Singapore and the United Kingdom, among other countries, where transactions in shares issued by Swiss companies can take place.

The measure was adopted on a temporary basis and was in force until December 31, 2021.

Then, in November 2021, the Federal Council agreed to extend the measure to protect the Swiss stock market infrastructure and to start the consultation procedure to incorporate it into common law.

The Federal Council considers that Switzerland fulfills all the requirements for the EU to recognize without limitation the equivalence of Swiss securities regulations, and this recognition remains its goal.

FINMA

Securities dealers must provide information and ensure the internal separation of their trading, portfolio management and clearing activities; the minimum fully paid-up capital required is CHF 1.5 million.

Also, foreign securities dealers can apply for FINMA authorization to establish a branch in Switzerland.

To do this, they must provide information and prove that they have an adequate organization, sufficient financial resources and qualified personnel, and must also be subject to adequate supervision.

In addition, foreign supervisory authorities must not oppose cross-border operations and must provide administrative assistance and information to FINMA.

Foreign participants can apply to FINMA for authorization to participate in Swiss trading venues.

FINMA will grant such authorization if foreign participants meet the following requirements, among others: foreign participants are subject to appropriate regulation and supervision and competent foreign supervisory authorities do not object to cross-border activities and offer administrative assistance to FINMA .

For their part, foreign trading venues may obtain the necessary recognition to grant direct access to their services to Swiss participants supervised by FINMA if they are subject to appropriate regulation and supervision.

 

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