On 9 October 2025, the Swiss Financial Market Supervisory Authority (FINMA) issued Guidance 04/2025, announcing an extension of the transitional period for the exchange of collateral in certain over-the-counter (OTC) derivative transactions. The current transitional period, which was due to expire on 1 January 2026, will now be extended for an additional three years until 1 January 2029. The extension applies to transactions not cleared through a central counterparty authorised or recognised by FINMA to maintain regulatory equivalence and market stability in line with evolving global frameworks.
FINMA’s Guidance 04/2025 builds upon prior extensions issued under Article 131 paragraph 6 of the Financial Market Infrastructure Ordinance (FinMIO). The obligation to exchange suitable collateral in non-centrally cleared OTC derivatives transactions is grounded in Article 107 paragraph 1 in conjunction with Article 110 paragraph 1 of the Financial Market Infrastructure Act (FinMIA) of 19 June 2015. The new guidance extends the transitional period defined under Article 131 paragraph 5bis FinMIO, which previously covered options on individual equities, index options, and similar equity derivatives such as baskets of equities. The decision follows developments in the EU, where an indefinite exemption from collateral exchange was introduced under Article 11 paragraph 3a of Regulation (EU) No 648/2012 (EMIR), and similar exemptions are being considered in the UK. FINMA’s guidance therefore ensures continued competitive parity and legal certainty within the Swiss derivatives market.
Extension of Transitional Period
“FINMA is extending the transitional period specified in Article 131 paragraph 5bis FinMIO to 1 January 2029.”
The decision marks a continuation of prior extensions issued through FINMA Guidance 04/2019, 09/2020, and 09/2023. The scope includes equity options, index options, and equity basket derivatives, ensuring that traders are not disadvantaged compared to their EU or UK counterparts.
International Developments and Regulatory Rationale
“Based on these international developments and to avert disproportionate competitive disadvantages for Swiss derivatives traders, the transitional period needs to be extended again.”
FINMA noted that the EU’s indefinite exemption, introduced in December 2024, necessitated a corresponding adjustment to Swiss law. The extension aligns with Article 131 paragraph 6 FinMIO, which authorises FINMA to modify the transitional timeline to reflect global regulatory trends. FINMA also expressed support for embedding a long-term regulatory solution into the ongoing FinMIA revision to ensure sustained consistency with international frameworks.
Compliance Obligations for Supervised Institutions
“Supervised institutions active in derivatives trading have to comply with risk management requirements, which are applicable to them and in this context have to consider the risks which stand to the trading of options on individual equities, index options or similar equity derivatives.”
Institutions must continue to implement adequate internal risk controls, particularly in relation to counterparty exposure, operational resilience, and collateral management practices during the extended transitional period.
Timeline
The guidance takes effect immediately upon publication on 9 October 2025, extending the collateral exchange transitional regime until 1 January 2029. The measure ensures Swiss regulatory parity with the EU and UK while the broader FinMIA revision process progresses toward codifying a permanent, harmonised framework for OTC derivatives oversight.
(Source: https://www.finma.ch/en/news/2025/10/20251009-meldung-am-04-25/)
