FINMA Aligns Derivatives Rules with EU, UK: Extends Transitional Period for Equity Options

<p>In response to legal developments in financial hubs
like the EU and the UK, the Swiss financial markets regulator has extended the
transitional period for exchanging collateral for non-centrally cleared over-the-counter (OTC) derivative transactions involving options on equities and indices. </p><p>This decision extends the
transitional period of such transactions until January 2026 as a strategic response to aligning with global legal developments. The initiative aims to protect Swiss derivatives traders from any potential disadvantages from evolving international regulations.</p><p>FINMA's Response to Global Regulations</p><p>The landscape of financial regulations in key global
centers has been undergoing significant changes. This has compelled FINMA to reevaluate
and align its regulations accordingly. Recently, the Canadian securities regulatory authorities <a href="https://www.financemagnates.com/institutional-forex/canada-adopts-international-standards-to-regulate-derivatives-dealers/" target="_blank" rel="follow">introduced a business conduct rule</a> aimed at governing OTC derivatives dealers and advisors. </p><p>Set to become effective by September 2024, this rule
marks a pivotal step in aligning Canadian standards with global practices, <a href="https://www.financemagnates.com/" target="_blank" rel="follow">Finance Magnates</a> reported.
It's designed to fortify transparency, accountability, and ethical practices
within the OTC derivatives market.</p><p>Facing a New Regulatory Framework</p><p> This regulation encompasses mandates surrounding fair dealing, conflict of interest management,
reporting non-<a href="https://www.financemagnates.com/terms/c/compliance/">compliance</a>, and diligent recordkeeping. It is designed to adhere to international benchmarks. Thus, the Canadian watchdog has emphasized the importance of these obligations, underscoring their role in fortifying
market integrity.</p><p>Meanwhile, FINMA recently <a href="https://www.financemagnates.com/institutional-forex/swiss-finma-licensing-surge-950-portfolio-managers-and-trustees-get-the-green-light/">experienced a surge in regulatory developments</a>, exemplified by its issuance of 950 licenses to
portfolio managers and trustees. This substantial number of approvals represents a
culmination of 1,749 license applications received by FINMA. It underscores a
rising demand for financial services in Switzerland.</p><p>Securing a license from FINMA involves meticulous steps commencing with self-registration.
These stages, as outlined by the regulator, ensure a systematic approach to
evaluating and approving portfolio managers and trustees.</p><p>FINMA's guidance involves a risk-based
monitoring model, emphasizing rigorous scrutiny aligned with the assessed risk
levels of the entities. Besides that, the Swiss regulatory landscape has
evolved with the enactment of the Financial Institutions ACT and the Financial
Services Act. </p>

This article was written by Jared Kirui at www.financemagnates.com.