On 3 July 2025, the Swiss Financial Market Supervisory Authority (FINMA) launched consultations on two new ordinances, the Ordinance on the Risk Diversification of Banks and Securities Firms (RDO-FINMA) and the Ordinance on the Liquidity of Banks and Securities Firms (LiqO-FINMA), set to replace three existing FINMA circulars and take effect from 1 January 2027.
The consultation, which runs until 29 September 2025, aims to establish FINMA’s regulatory hierarchy obligations under Article 7(1) of the Swiss Financial Market Supervision Act (FINMASA). The new ordinances will replace FINMA Circulars 2019/1 (Risk Diversification), FINMA Circular 2013/7 (Intra-Group Position Limits), and FINMA Circular 2015/2 (Liquidity Risks). FINMA stated that the content remains substantially consistent, with targeted technical updates aligned with Basel III reforms and industry feedback.
With the adoption of the two new ordinances, FINMA is executing a systematic consolidation and upgrade of existing regulatory guidance into formalised secondary legislation. The circulars being repealed are FINMA Circulars 2019/1, 2013/7, and 2015/2, which have previously governed risk diversification thresholds, intra-group exposures, and liquidity management practices for Swiss banks and securities dealers.
RDO-FINMA: Risk Diversification
The Ordinance on the Risk Diversification of Banks and Securities Firms (RDO-FINMA) primarily codifies existing rules but incorporates limited substantive revisions. Amendments include alignment with the final Basel III standardised approach for market risks, which came into effect globally on 1 January 2025. These changes refine the calculation of trading book exposures under the new framework. The ordinance introduces clarified provisions regarding guarantees from foreign group entities within the context of intra-group position limits.
LiqO-FINMA: Liquidity Requirements
The Ordinance on the Liquidity of Banks and Securities Firms (LiqO-FINMA) largely transposes the provisions of FINMA Circular 2015/2, while adding technical implementation rules that reflect ongoing amendments to the Federal Council’s LiqO ordinance. These updates are partly driven by the Swiss government’s “too big to fail” (TBTF) initiative and involve the supplementation of Article 7(1) of the Federal Council’s LiqO with explicit requirements for liquidity and financial planning. The new ordinance also addresses specific concerns raised by market participants during preliminary engagements.
Implementation Timeline and Regulatory Impact
Subject to the outcomes of the consultation, both RDO-FINMA and LiqO-FINMA are scheduled to come into force on 1 January 2027, synchronised with the repeal of the three aforementioned circulars. FINMA has assured stakeholders that the new ordinances will not introduce substantial new obligations, aside from technical recalibrations already anticipated by the industry. The consultation process is open to banks, securities firms, industry associations, and other affected stakeholders, who are invited to provide feedback by the 29 September 2025 deadline.
(Source: https://www.finma.ch/en/news/2025/07/20250703-mm-anh-rvv-liq-banken/)
