MARKETS
Overview of markets In 2011, FINMA’s Markets division ensured the proper functioning of the multi-level supervisory process for collective investment schemes, while also focusing on new technological developments with regard to stock exchanges and securities dealing, and on international regulatory and implementing projects such as the AIFMD and the UCITS IV Directive. One important trend affecting the proper
to authorise asset managers subject to supervision.
functioning of the financial markets is the many
For example, as part of the structural reform to
new technological developments on the stock
occupational pensions it has been stipulated that
exchanges and in securities dealing. The advances
from 1 January 2014, only persons and institutions
made in data processing and communications
supervised by FINMA or recognised by the oversight
technology have brought about marked changes in
committee will be allowed to manage occupational
the execution and settlement of securities trading
pension schemes.
transactions. The latest development in this regard
With the aim of ensuring client protection,
is high frequency trading (HFT), where computers
FINMA carried out various checks as part of its risk-
carry out thousands of purchase and sale orders
based supervisory approach to supervised institu-
independently in milliseconds so as to exploit the
tions covered by the Collective Investment Schemes
smallest of price differences between the various
Act. One of the issues examined was the proper
trading venues.
functioning of the multi-level supervisory process
The trading venues themselves are also subject
for collective investment schemes. The Collective
to continual change, in particular multilateral trad-
Investment Schemes Act itself provides mutual
ing facilities (MTF) in accordance with the Markets
monitoring obligations for certain licence holders.
in Financial Instruments Directive (MiFID), cross-
For example, the custodian bank of a Swiss collective
ing networks and also dark pools. Together with
investment scheme is not only responsible for the
Liquidnet Europe Limited, SIX Swiss Exchange has
safekeeping of assets, it also has a monitoring func-
set up a dark pool for executing block trades. Some
tion45 in respect of fund management companies
3,600 securities from Switzerland, the UK, France,
and SICAVs that includes monitoring the calculation
Germany and the Netherlands can be traded on
of the net asset value and verifying whether the
the SIX Swiss Exchange Liquidnet Service platform.
investment decisions are in compliance with the Act
Stock exchanges and alternative trading facilities
and the fund contract. In its supervision of custodian
share a common function, namely to bring together
banks, FINMA found the performance of monitor-
buyers and sellers of securities.
ing duties by certain institutions to be unsatisfactory or non-existent. It therefore instructed audit firms
Client protection is the core principle Besides international regulatory and implementing projects such as the AIFMD and the UCITS
to make a detailed statement on this in their next audit report. Should the suspected shortcomings be confirmed, FINMA will take appropriate measures.
IV Directive, national developments also placed
In the case of fund management companies,
increasing pressure on market participants with
FINMA conducted an in-depth review focusing on
regard to client protection, particularly on the
those that predominantly or exclusively manage
institutional asset management sector. Clients are
real estate funds. FINMA looked at the operational
increasingly only working with authorised institu-
organisation of fund management companies, with
tions, and there are also regulatory intentions only
particular reference to the professional qualifications
In accordance with Art. 73 para. 3 CISA.
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Annual Report 2011 | FINMA
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